New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Understanding Taxable Gifts: What Southwest Gas Holdings Employees Need to Know Before Making Their Next Move

Healthcare Provider Update: Healthcare Provider for Southwest Gas Holdings Southwest Gas Holdings provides healthcare benefits through a variety of insurers, primarily utilizing Aetna for their healthcare plans. This partnership enables employees to access a broad network of healthcare services. Expected Healthcare Cost Increases in 2026 As we approach 2026, healthcare costs are anticipated to soar, significantly impacting those affiliated with Southwest Gas Holdings. This expected surge stems from factors such as the expiration of enhanced federal subsidies for Affordable Care Act (ACA) plans, which could lead to a staggering increase of over 75% in out-of-pocket premiums for many enrollees. Moreover, aggressive rate hikes from major insurers, combined with rising medical costs, suggest that employees and retirees may face a challenging financial landscape in the coming year. Proactive management of health benefits and planning will be crucial for individuals navigating these increasing costs. Click here to learn more

What Are Taxable Gifts?

Property you give away during your life may be taxable gifts subject to the federal gift and estate tax for Southwest Gas Holdings employees. You or your estate could pay as much as a 40 percent tax (in 2019 and 2020) on taxable gifts. To estimate and reduce this tax, you need to understand what taxable gifts are and how the federal gift and estate tax system works.

Caution: Some states impose their own gift tax.

Tip: Generally, gifts Southwest Gas Holdings employees receive are not subject to tax (except for some states that tax inheritances). However, gifts or bequests (in the form of money or property) received from a foreign person or estate that are valued (in the aggregate per year) at more than $100,000 are reportable, as are gifts in excess of $17,000 in 2023, which is an increase from $16,000 in 2022. Recipients of such gifts must file Form 3520 with the IRS on or before the due date of the recipient's income tax return (including extensions). Failure to do so may subject the recipient to a penalty of 5 percent of the value of the gift for each month the gift goes unreported (not to exceed a total of 25 percent of the gift). Excluded from this rule are gifts made directly to a school for tuition or to a healthcare provider for medical expenses.

How Does the Federal Gift and Estate Tax System Work?

Taxable gifts are treated in a special way.

First, taxable gifts must be reported, and the gift tax is paid annually. Southwest Gas Holdings employees must file a gift tax return and pay the gift tax due, if any, by April 15 of the tax season that follows the year in which they make a taxable gift.
Second, when you die, all taxable gifts made during your lifetime are added to your taxable estate (property you own at death) in order to calculate any estate tax that may be owed. This pushes your net taxable estate (what the estate tax is computed on) into a higher tax bracket. Any gift tax you paid is deducted from any estate tax owed.

Caution: Lifetime gifts to beneficiaries who are more than one generation below you may also be subject to the federal generation-skipping transfer tax.

Is It a Gift?

Gifts can be made either directly (i.e., from you to another person) or indirectly (i.e., from you to another person for the benefit of a third party). To determine whether a taxable gift has occurred, the answer to the following questions must be yes.

Was the gift voluntary? — Did you freely give property to another individual or organization? Transfers of property that you are legally obligated to make are not gifts. For example, payments you make to support your minor children, or payments you make as a result of a court judgment, are not gifts.
Was the gift complete? — Southwest Gas Holdings employees must relinquish control over the property. A taxable gift has not occurred if you retain the power to change or revoke the gift. A gift is complete only upon delivery. Completion of delivery varies according to the nature of the gift. For example, a gift of cash is complete when given, a gift of a personal check is complete when paid, a gift of stock is complete on the date the endorsed certificate is delivered, and a gift of real estate is complete when the deed is recorded.
Was the gift made in exchange for nothing or property of lesser value? — Ordinarily, you may think of a gift as something you give expecting nothing in return. But gifts also include uneven exchanges of property. The value of the gift is the difference between the exchange.

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Example(s): Alec gives his old Harley-Davidson motorcycle, valued at $3,000, to his younger brother, William, in exchange for $500. Alec has made a $2,500 gift.

Caution: An uneven exchange is not a gift, however, if it is a legitimate business sale or just a bad bargain.

Is it a Taxable Gift?

Some types of gifts are exempt from the gift tax. These include:

Tuition paid to an educational institution — Southwest Gas Holdings employees can pay for tuition at a private school, college, or other qualified educational institution without incurring gift tax as long as the payment is made directly to the institution. This exclusion is limited to tuition costs and does not include payments for books, supplies, or dormitory fees. You don't need to file a gift tax return with respect to this type of gift.
Medical expenses paid to the medical care provider — Southwest Gas Holdings employees can pay for someone else's medical bills without incurring gift tax as long as payment is made directly to the medical care provider. This exclusion is not allowed for amounts reimbursed by insurance. You don't need to file a gift tax return with respect to this type of gift. • Annual gift tax exclusion — You are allowed to exclude $15,000 (in 2019 and 2020) of gifts given to each and every person or organization each year from the amount subject to tax, provided that the gift is of a present interest in property.

Tip: For gifts made after August 5, 1997, Southwest Gas Holdings employees don't need to file an annual gift tax return with respect to gifts that are within the annual gift tax exclusion unless you have split gifts with your spouse or have made a partial interest gift to charity (a partial interest gift is split between charitable and noncharitable beneficiaries).

Tip: The annual gift tax exclusion may also reduce the federal generation-skipping transfer tax.

Gifts to spouses — Qualified gifts to spouses are fully deductible under the unlimited marital deduction if your spouse is a U.S. citizen. Gifts you give to your non-U.S. citizen spouse qualify for a $157,000 (in 2020, $155,000 in 2019) annual gift tax exclusion, but no unlimited marital deduction is allowed.

Tip: For gifts made after August 5, 1997, interspousal gifts that fully qualify for the unlimited marital deduction need not be reported on a gift tax return for the year unless other taxable gifts or partial interest gifts to charity have also been made (partial interest gifts are split between charitable and noncharitable beneficiaries).

Gifts to charity — Qualified gifts to charity are fully deductible under the charitable deduction for Southwest Gas Holdings employees.

Tip: Gifts to charity made after August 5, 1997, need not be reported if all gifts for that year are fully deductible under the charitable deduction.

Applicable exclusion amount — The applicable exclusion amount effectively exempts the first $11,580,000 (in 2020, $11,400,000 in 2019) plus any deceased spousal unused exclusion amount of taxable gift you make. You must use your applicable exclusion amount before you become liable for any gift tax. Any applicable exclusion amount you use for lifetime gifts effectively reduces the amount that will be available at your death.

How does the Southwest Carpenters Pension Plan accommodate changes in benefits for employees who have been affected by the COVID-19 pandemic, and what specific provisions have been implemented to ensure continuity of pension credit during such interruptions? Employees of the Southwest Carpenters Pension Plan are particularly encouraged to review how these provisions may impact their retirement plans and benefits, especially given the unprecedented circumstances of the pandemic.

The Southwest Carpenters Pension Plan accommodated changes due to COVID-19 by extending various deadlines for participants, such as the 12-month deadline to apply for pension credit for periods of disability, and other deadlines regarding claims and appeals. These extensions were applied from March 1, 2020, to a period of up to one year after the original deadline or 60 days after the end of the COVID-19 national emergency, ensuring continuity of pension credit during the pandemic interruptions(Southwest Carpenters Pe…).

What enhancements to pension benefit calculations have been introduced for the years following January 1, 2021, under the Southwest Carpenters Pension Plan, and how do these changes affect participants working more than 1,800 hours? This question emphasizes the implications of increased benefit accrual rates and the actual processes employees must follow to calculate their pensions effectively.

Enhancements to pension benefit calculations effective January 1, 2021, under the Southwest Carpenters Pension Plan include an increase in the monthly benefit accrual rate for participants working 1,800 hours or more. The rate increased from $100 to $200, and for those working more than 1,800 hours, a maximum benefit accrual rate of $244.44 was introduced(Southwest Carpenters Pe…).

In the context of the Southwest Carpenters Pension Plan, could you explain the eligibility criteria for receiving a Service Pension and how employees can accumulate the necessary Pension Credits more quickly? This consideration is vital for members who wish to understand the retirement options available to them and the strategies they might employ in their careers to maximize their benefits under the Southwest Carpenters Pension Plan.

Employees of the Southwest Carpenters Pension Plan are eligible for a Service Pension after earning 30 years of Pension Credit. Additional Service Pension Eligibility Credit was introduced, allowing employees working over 1,800 hours annually to accumulate credits more quickly, up to a maximum of 2,200 hours(Southwest Carpenters Pe…).

How do temporary disability benefits interact with the accumulation of Pension Credits within the Southwest Carpenters Pension Plan? Specifically, employees may have questions about how their working history and service time might be affected should they take leave for health-related reasons, highlighting the intricate balance between pay and benefits during challenging times.

Temporary disability benefits under the Southwest Carpenters Pension Plan allow participants to accumulate Pension Credits during non-working periods if they are on short-term disability or receiving workers' compensation. Pension Credits can be granted for up to 1,200 hours annually, depending on the nature of the disability and employment history(Southwest Carpenters Pe…).

What are the implications of the revised definitions under the Required Beginning Date as specified by the Southwest Carpenters Pension Plan, particularly in compliance with the SECURE Act (Setting Every Community Up for Retirement Enhancement Act)? Employees should understand how these legislative changes affect their retirement strategies, especially in light of penalties for failing to comply with mandatory commencement dates.

The Required Beginning Date for the Southwest Carpenters Pension Plan was revised to comply with the SECURE Act. Participants born on or after July 1, 1949, must begin receiving benefits by April 1 of the calendar year following the year they turn 72. Failure to comply with this could result in a 50% excise tax(Southwest Carpenters Pe…).

How can employees of the Southwest Carpenters Pension Plan navigate the process for applying for pension credit during periods of Temporary Disability, and what specific documentation is required? This inquiry encourages a deeper understanding of protocol surrounding disability applications and the associated benefits that participants are entitled to under the Plan.

Employees applying for pension credit during periods of Temporary Disability must submit a written application within one year of the onset of the disability, and provide documentation such as state-approved short-term disability certification or workers' compensation benefits(Southwest Carpenters Pe…).

What are the implications of the retroactive increases to the Southwest Carpenters Pension Plan benefits aimed at participants who accrued credit during the years 2011 to 2020, and how can affected employees determine their eligibility for said increases? Employees often seek clarification on how historical contributions can manifest in current benefits.

Retroactive increases to the Southwest Carpenters Pension Plan benefits for the years 2011 to 2020 apply to participants who worked at least 1,000 hours in 2020 or under specific collective bargaining agreements. A 50% increase in benefit accrual rates was applied to these years, and eligible employees can determine their eligibility based on their hours worked(Southwest Carpenters Pe…).

What role does the Southwest Carpenters Administrative Office play in assisting employees who have questions regarding modifiability in their pension plans, and what are the best methods for contacting them for assistance? This question highlights the importance of communication within the organization concerning employee inquiries and issue resolution.

The Southwest Carpenters Administrative Office assists employees with questions regarding modifications to their pension plans. Participants can contact them at (213) 386-8590 or (800) 293-1370 for personalized assistance(Southwest Carpenters Pe…).

Can you detail the factors influencing the Benefit Accrual Rate for participants of the Southwest Carpenters Pension Plan for the calendar years after 2021, and how might employees calculate their expected pension benefits? Participants will want to understand the nuances of how their benefits are computed to make informed decisions regarding their retirement planning.

The Benefit Accrual Rate for participants of the Southwest Carpenters Pension Plan after 2021 increased to $200 for 1,800 hours worked, with higher accrual rates for additional hours. Employees can calculate their benefits by multiplying their benefit accrual rate by the applicable benefit factor(Southwest Carpenters Pe…).

In the event of legal actions regarding benefits under ERISA against the Southwest Carpenters Pension Plan, what venue restrictions apply, and what does this mean for participants seeking resolution in disputes? Employees need to be informed of the legal frameworks governing their benefits and understand their rights and the procedures that affect their claims within the Southwest Carpenters Pension Plan.

Legal actions regarding benefits under ERISA against the Southwest Carpenters Pension Plan must be filed in Federal District Court in Los Angeles County, California. This venue restriction defines the jurisdiction where participants must file claims(Southwest Carpenters Pe…).