IRS Archives - Page 7 of 34 - EMPLOYEE BENEFITS BLOG

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

by David Fuller | Aug 12, 2020 | 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 and Sarah L. Engle | Jul 15, 2020 | 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 | Jul 9, 2020 | 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 | Jun 25, 2020 | 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 | Jun 16, 2020 | 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 Issues Relaxed Cafeteria Plan Rules

by Jacob Mattinson and McDermott Will & Emery | May 26, 2020 | Health and Welfare Plans

To help cafeteria plan participants address challenges arising from the COVID-19 crisis, the Internal Revenue Service recently issued guidance allowing employers to make a number of participant-friendly changes under their cafeteria plans. While employer adoption of these more flexible rules is voluntary, plan sponsors should work with third-party administrators, insurance providers and legal advisors to ensure that the new provisions are properly adopted, documented and communicated.

Access the full article.

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

by Jacob Mattinson | May 21, 2020 | 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.

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

by Allison Wilkerson, Diane Morgenthaler and Erin Steele | May 18, 2020 | Benefit Controversies, Employee Benefits, Employment, Fiduciary and Investment Issues, 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.

DOL Relaxes Deadlines for ERISA-Governed Group Health Plans

by Jacob Mattinson and Megan Mardy | May 13, 2020 | Benefit Controversies, Employee Benefits, Employment, Health and Welfare 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.

SUB-Pay Plans: An Alternative to Severance Programs

by David Fuller | Apr 16, 2020 | Employee Benefits

SUB-Pay Plans: An Alternative to Severance Programs

While the coronavirus pandemic wreaks havoc on the economy and jobs, employers consider disaster-related employee benefit structures, such as easily administered qualified disaster assistance relief programs and the financially attractive severance alternative known as “supplemental unemployment benefit plans” or “SUB-pay plans.” Compared to the typical severance program, restructuring a temporary or permanent layoff program as a SUB-pay plan can yield financial and tax savings exceeding 30% of an employer’s typical severance costs while also providing FICA tax savings to employees of 7.65%.

Access full article.

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