Determine the appropriate account limits. If total account limits equal or exceed total assets, stop. The VEBA has no liability for tax on its investment income. If assets exceed total account limits, determine the amount of the difference. Compare investment income to excess assets.
Tax is imposed on the lesser of the two amounts.
Request an explanation of the calculation of any amounts identified as a reserve for incurred but unpaid claims. If any amount is claimed as a reserve for postretirement medical or life insurance benefits, verify that funds are actually being held for that purpose, and not expended currently. If there is unrelated business income, analyze the overhead, administrative, and other expenses and review the basis for allocation of the expenditures. 104 certain death benefits under IRC 101 employer contributions to accident and health plans under IRC 106 certain educational assistance benefits under IRC 127. You are not normally responsible for determining whether an employer is correctly reporting, for employment tax purposes, payments made to VEBAs.