January Newsletter
IRS provide guidance on new tax benefits for health savings account participants under the One, Big, Beautiful Bill
The Treasury Department and the IRS released Notice 2026‑05 on Dec. 9, 2025, outlining new tax advantages for people who use Health Savings Accounts (HSAs) under the One, Big, Beautiful Bill (OBBB). The guidance explains several updates that broaden who can qualify for an HSA, giving more individuals the opportunity to save and pay for medical expenses with tax‑free funds.
Key HSA Eligibility Expansions Under the OBBB
Telehealth and Remote Care
Starting with plan years that begin on or after January 1, 2025, individuals can permanently receive telehealth or other remote medical services before meeting their high‑deductible health plan (HDHP) deductible and still remain eligible to contribute to an HSA.
Bronze and Catastrophic Plans Count as HDHPs
Beginning January 1, 2026, any bronze or catastrophic plan offered through a Health Insurance Exchange will automatically be treated as HSA‑compatible, even if the plan doesn’t meet the usual HDHP requirements. Notice 2026‑05 also confirms that these plans qualify for the new rules even if purchased outside an Exchange.
Direct Primary Care (DPC) Arrangements
As of January 1, 2026, individuals enrolled in certain direct primary care service arrangements may contribute to an HSA. They may also use HSA funds tax‑free to pay their recurring DPC fees.
Additional Information and Public Comments
Notice 2026‑05 provides detailed explanations of each change. The Treasury Department and IRS are accepting public comments on the Notice until March 6, 2026.
Comments may be submitted:
Online through the Federal e‑Rulemaking Portal (reference “IRS‑2025‑0335”)
By mail to: Internal Revenue Service CC:PA:01:PR (Notice 2026‑05) Room 5503 P.O. Box 7604 Ben Franklin Station Washington, DC 20044
For further details, visit the OBBB provisions page on IRS.gov..
IRS provide safe harbor taxpayers claiming the carbon capture credit
The Treasury Department and the IRS released new guidance on Dec. 19, 2025, for taxpayers planning to claim the expanded carbon capture and sequestration tax credit included in the One, Big, Beautiful Bill. Notice 2026‑01 establishes a safe harbor for claiming the credit for qualified carbon oxide that is captured and securely stored underground during the 2025 calendar year.
Safe Harbor Details
Notice 2026‑01 outlines a safe harbor process for determining both eligibility for the credit and the amount taxpayers may claim for carbon oxide captured and permanently stored in accordance with the rules under section 45Q of the Internal Revenue Code during 2025.
If the Environmental Protection Agency does not release its electronic Greenhouse Gas Reporting Tool for the 2025 reporting year by June 10, 2026, taxpayers may instead submit an annual report to an independent, qualified engineer or geologist. That professional must certify that the carbon capture and storage activities described in the report meet the greenhouse gas reporting requirements that were in place as of Dec. 31, 2025, following the procedures laid out in the notice.
The guidance also explains that Treasury and the IRS plan to issue formal regulations under section 45Q—covering topics such as measurement and verification standards—and that taxpayers may rely on the safe harbor rules in Notice 2026‑01 until those regulations are finalized.
This update is particularly relevant for businesses intending to claim credits for carbon oxide captured and securely stored during 2025.
For additional details on tax changes under the OBBB, visit the One, Big, Beautiful Bill provisions page on IRS.gov..
Disaster relief resources available for flood-impacted businesses and individuals
OLYMPIA, Wash. – Dec. 19, 2025 — The Washington State Department of Revenue is providing support for businesses and property owners who have been affected by the recent flooding across the state.
Businesses that are unable to file or pay their excise tax returns on time because of flood impacts should reach out to the Department of Revenue to request a filing extension before their deadline. For eligible businesses that missed the chance to request an extension before taxes were due, the department may also waive penalties.
Property owners whose homes or buildings were damaged or destroyed in the floods can apply to their County Assessor for a reduction in the taxable value of their property. Approved applicants may see lower property taxes for 2025 and possibly 2026, depending on the extent of the loss.
“We want people to know that the Department of Revenue is here to help them through these challenging circumstances,” said Acting Director John Ryser.
Flood‑affected businesses may also request additional assistance, including:
A credit application for timber damaged by the disaster for forest tax purposes
Rescheduling of an upcoming audit or hearing
A penalty waiver for businesses unable to renew their license on time
An extension for an expiring reseller permit
The Department of Revenue is also working with counties hit by the floods to help them adjust to changes in property values and the resulting effects on local levies and tax bills.
More information about disaster‑related relief is available on the Department of Revenue’s website. Anyone with questions can call the department’s customer service team at 360‑705‑6705.
