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

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.

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

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Deja Vu with Retirement Plan Extension 2

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.

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Treasury/IRS Release Proposed Regulations on Section 4960 Excise Tax

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.

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DOL Issues Final Electronic Disclosure Rule for 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.

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

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COVID-19 Ate My Homework – Recent Extensions and Relief for Retirement Plans

In recognition of the difficulties faced by retirement plan sponsors, participants and beneficiaries due to the COVID-19 pandemic, new guidance extends the deadlines for notices and disclosures required by Title I of ERISA and extends deadlines for retirement plan participants and beneficiaries to submit benefit claims and benefit appeals. The new guidance also provides some welcome fiduciary relief for electronic disclosures, incomplete plan loan or distribution documentation, as well as delayed participant contributions and loan repayments. Access the full article.

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DOL Relaxes Deadlines for ERISA-Governed Group Health Plans

The US Department of Labor, in conjunction with the Internal Revenue Service and US Department of the Treasury, issued guidance and deadline extensions applicable to ERISA-governed group health and welfare plans. The guidance provides relief for plan sponsors, plan administrators and plan participants that may be struggling to comply with applicable deadlines and requirements in the midst of the chaos related to the COVID-19 pandemic. Access the full article.

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