Search Results for: hardship

When to Amend: Deadline for Compliance with Hardship Distribution Regulations Clarified

The Bipartisan Budget Act of 2018 and the Tax Cuts and Jobs Act of 2017 liberalized the hardship distribution rules applicable to 401(k) and 403(b) plans. On September 23, 2019, the IRS issued final regulations — which we discussed in a previous blog — implementing the new hardship distribution rules. While some of the new … Continue Reading

The Final Regulations For 401(k)/403(b) Hardship Distributions

On September 23, 2019, the Treasury Department and IRS published final regulations for hardship distributions from both 401(k) and 403(b) plans (the “Final Regulations”).  Essentially the hardship distributions changes relax the hardship distribution requirements (i.e., making it easier for participants to obtain hardship distributions) and eliminate many burdens following a hardship distribution (i.e., allowing participants … Continue Reading

IRS Proposed Regulations Implementing Changes To Hardship Distribution Rules

Earlier this year we reported on legislative changes that modified the requirements related to hardship distributions from 401(k) plans.  Recently, the IRS issued proposed regulations that if finalized will implement those changes. Background The Internal Revenue Code (the “Code”) and associated regulations generally place restrictions on participants’ ability to withdraw their elective deferrals from 401(k) … Continue Reading

401(k) and 403(b) Plan Hardship Distribution Substantiation: What Will the IRS Be Looking For?

On February 23 and March 7, 2017, the Internal Revenue Service (“IRS”) issued memoranda to examination agents addressing review of substantiation provided in support of safe harbor hardship distributions under 401(k) and 403(b) plans. Although the memoranda cannot be relied upon as official guidance, they are good reference points to help plan sponsors and third … Continue Reading

IRS Publishes Guidance Allowing Taxpayers to Self-Certify An Excuse from the 60-day Rollover Rule in Specified Hardship Scenarios

If you ask, plan administrators will tell you that for every deadline or specified time limit that is imposed by law upon plan participants for taking action with respect to an employee benefit plan, there are always a significant number of participants who come forward with one or more “excuses” why they could not meet … Continue Reading

Employee Benefits Issues to Consider Before Deciding to Furlough or Terminate Employees During the COVID-19 Pandemic

With the combination of our nation’s response to COVID-19 and the resultant economic downturn, employers of all sizes face the moral and financial dilemma of evaluating employee headcounts while businesses are grappling with the reality of the current situation.  Many employers are considering furloughs, or other types of approved leaves of absences, to reduce immediate … Continue Reading

Using Leave Sharing Plans with COVID-19

The IRS has issued specific guidance for the tax treatment of a leave-sharing arrangement that permits employees to donate PTO/ leave/vacation time in an employer-sponsored leave bank for use by other employees adversely affected by an event declared a major disaster or emergency by the President.  See IRS Notice 2006-59. TAX TREATMENT OF DONATING EMPLOYEE … Continue Reading

Benefits Outside the Box: Using a Charitable Foundation to Enhance Your Culture and Community

If your Company leadership is looking for an innovative employee benefit – something outside the standard employee benefit package of retirement, health, and welfare benefits, a Company-sponsored charitable foundation might be your answer.   A charitable foundation not only can further your Company culture while serving the community, but it also has tax benefits to boot. … Continue Reading

IRS Reverses the $50 HSA Reduction for 2018

We recently informed you that the IRS reduced the 2018 health savings account (“HSA”) contribution limit for individuals with family coverage to $6,850.00 despite having previously announced that such limit was $6,900.  Because of compelling comments from stakeholders, the IRS reversed this decision in Revenue Procedure 2018-27 and the contribution limit for individuals with family … Continue Reading

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