Internal Revenue Service Archives - EMPLOYEE BENEFITS BLOG

Employers Cast Wary Eye on President Trump’s Deferral of Payroll Tax

By David Fuller on Aug 12, 2020
Posted In Benefit Controversies, Employment

Employers considering President Trump’s plan to allow deferred payment of payroll taxes face a series of costs, uncertainties and headaches. The president wants employers to stop collecting the 6.2% levy that is the employee share of Social Security taxes for many workers, starting September 1 and going through the end of the year. The president’s plan doesn’t change how much tax employees and employers actually owe. Only Congress can do that. In a recent article by The Wall Street Journal, David Fuller, a tax lawyer at McDermott in Washington, DC, said, “We’re looking at a crystal ball not knowing what we’re going to see.” Access the article.

More Caring: New CARES Act Guidance for Retirement and Nonqualified Plans

By Diane Morgenthaler, Joshua N. Lerner and Sarah L. Engle on Jul 15, 2020
Posted In Employee Benefits, Employee Stock Ownership Plans (ESOPs), Executive Compensation, Retirement Plans

New Internal Revenue Service (IRS) guidance expands the availability of Coronavirus Aid, Relief and Economic Security Act (CARES Act) distributions and loans under eligible retirement plans, and it provides important clarifications regarding how to administer and report CARES Act distributions and loans. The guidance also provides welcome relief for a participant who receives a CARES Act distribution, allowing the participant to revoke an otherwise irrevocable salary deferral election under a nonqualified deferred compensation plan. Finally, consistent with prior guidance, the new IRS guidance confirms that CARES Act provisions are optional, meaning that plan sponsors may choose whether to implement CARES Act changes. Access the full article.

Deja Vu with Retirement Plan Extension 2

By Erin Steele, Joseph K. Urwitz and Lisa Loesel on Jul 9, 2020
Posted In Employee Benefits, Retirement Plans

In response to the administrative difficulties faced by plan administrators due to the ongoing COVID-19 pandemic, the Internal Revenue Service (IRS) recently issued Notice 2020-35, which extends additional retirement plan deadlines for 2020 not previously extended under IRS Notice 2020-23. The IRS also stated that this relief applies for purposes of ERISA if the tax code deadline has a corresponding ERISA provision. Access the full article.

Treasury/IRS Release Proposed Regulations on Section 4960 Excise Tax

By Ralph E. DeJong and Robert C. Louthian, III on Jun 25, 2020
Posted In Employee Benefits, Employment, Executive Compensation

The US Department of the Treasury has released long-expected proposed regulations regarding the section 4960 excise tax on certain remuneration or separation amounts paid to the five highest paid employees of a tax-exempt organization. The new proposed regulations continue the tough approach previously taken on section 4960 issues, while also providing some new exceptions and important clarifications. Access the full article.

DOL Issues Final Electronic Disclosure Rule for Retirement Plans

By Jacob Mattinson, Alan D. Nesburg, PC and Erin Steele on Jun 16, 2020
Posted In Employee Benefits, Retirement Plans

Under the recently published final rule issued by the US Department of Labor, retirement plan administrators can choose to deliver required disclosures electronically by complying with the conditions of a new safe harbor. The final rule represents an opportunity for retirement plans to save costs and enhance participant access to disclosure documents. Access the full article.

IRS Announces 2021 Limits for Health Savings Accounts and High-Deductible Health Plans

By Jacob Mattinson and Judith Wethall on May 21, 2020
Posted In Health and Welfare Plans

The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the applicable dollar limits for health savings accounts (HSAs) and high-deductible health plans (HDHPs) for 2021. Some of the dollar limits currently in effect for 2020 will change for 2021. Access a table comparing the applicable dollar limits.

IRS Announces 2020 Limits for Health Savings Accounts and High-Deductible Health Plans

By Jacob Mattinson and Megan Mardy on May 30, 2019
Posted In Employee Benefits, Health and Welfare Plans

The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the applicable dollar limits for health savings accounts and high-deductible health plans for 2020. Nearly all of the dollar limits currently in effect for 2019 will change for 2020. See a comparison of the applicable dollar limits for HSAs and HDHPs for 2019 and 2020. Access the full article.

IRS Expands Self-Correction Program, Provides Welcome Relief for Plan Sponsors

By Jacob Mattinson, Erin Steele and Sarah L. Engle on May 23, 2019
Posted In Employee Benefits, Retirement Plans

The IRS recently released an updated version of EPCRS, the IRS’s program for correcting errors that occur under tax-qualified retirement plans. The latest version of EPCRS makes it easier for plan sponsors to self-correct certain types of plan loan, operational and plan document failures without filing a VCP submission. Access the full article.

Fridays With Benefits Webinar | Quick & Easy Recipes for Fixing 401(k) Plans

By Judith Wethall, Brian Tiemann, Allison Wilkerson and Sarah L. Engle on May 9, 2019
Posted In Employee Benefits, Retirement Plans

Join us Friday, May 17, as Allison Wilkerson, Brian Tiemann and Sarah Engle join host Judith Wethall to talk through the value of conducting a proactive self-audit of 401(k) plans. They will provide best practices designed to reduce the risk of costly government investigations. Attendees will come away prepared and confident in their position, and ready to respond assertively if an investigation comes to pass. Our lively 45-minute discussion will cover the following points: Self-auditing common compliance issues raised during IRS audits, including errors in administering the plan’s eligibility rules, compensation definition, loan procedures and minimum required distribution provisions Self-auditing common issues raised during DOL audits, including late payroll deposits Tips to enhance plan governance procedures Friday, May 17, 2019 10:00 – 10:45 am PST 11:00 – 11:45 am MST 12:00 – 12:45 pm CST 1:00 – 1:45 pm EST Register Now.

IRS Opens the Door to Lump Sum Payment Windows for Retirees in Pay Status

By J. Christian Nemeth, Jeffrey Holdvogt and Rick Stepanovic on May 2, 2019
Posted In Employee Benefits, Retirement Plans

Due to an Internal Revenue Service (IRS) change in course published in Notice 2019-18, plan sponsors may now offer retirees lump-sum windows as another pension “de-risking” option. Plan sponsors considering pension de-risking opportunities and options should carefully evaluate the potential benefits and risks of a retiree lump-sum window. Access the full article.

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