On May 1, 2019, the IRS issued Revenue Procedure 2019-20, which reopens the determination letter program in a limited manner for individually designed plans that are merged plans or statutory hybrid plans, such as cash balance plans. The new IRS guidance provides that sponsors of merged plans may request determination letters going forward, while
Is Your Employer Worksite Medical Clinic a Group Health Plan?
Worksite medical clinics, some offering round-the-clock access to medical providers via telemedicine, seem to be growing in popularity. Promoters tout cost savings resulting from what would otherwise be lost productivity (employees whiling away afternoons waiting to see their private doctors or having to drive long distances to have blood drawn for routine laboratory work)…
A Quick Form W-4 Reminder for Employers: May 10, 2019 Deadline for Updates
By Suzanne G. Odom on
The Tax Cuts and Jobs Act (the “Tax Act”) significantly changed the federal income tax rules. Several of these changes impact income tax withholding, including changes to the tax rates and brackets, increasing the standard deduction, and eliminating personal exemptions.
Normally, employees must provide their employers with an updated Form W-4 within 10 days of…
Severance Agreements for Executives at Tax-Exempt Organizations: Beware Unintended Consequences of Excise Taxes, Early Inclusion, and Intermediate Sanctions
When it’s time for tax-exempt organizations such as colleges/universities, museums, and hospital systems to part ways with their senior executives, these institutions are most often considering how to best transition these executives off into the sunset rather than a morass of special tax rules (I will mention Internal Revenue Code citations just once for reference)…
IRS CORRECTION PROGRAM, NOW MORE EFFICIENT
In 2008, the IRS established a voluntary correction program aimed at plan sponsors and administrators to encourage resolution of plan document or operational failures as soon as they are discovered. The Employee Plans Compliance Resolution System, or “EPCRS” as it is most often called, stresses the importance of established administrative practices and procedures to avoid…
Interim IRS Guidance Addressing Taxation Impact of Transportation and Parking Fringe Benefits Creates Planning Opportunities for Employers
By Melissa Ostrower & Suzanne G. Odom on
In Notice 2018-99, the Internal Revenue Service sets forth interim guidance for taxpayers to determine parking expenses for qualified transportation fringes (QTFs) that are nondeductible and for tax-exempt organizations to determine the increase in unrelated business taxable income (UBTI) attributable to nondeductible parking expenses. The Tax Cuts and Jobs Act (Act) amended these tax…
Making the Loss of the SALT Deduction Sting a Little Less
By Robert R. Perry on
As tax time rapidly approaches, taxpayers in states with high state and local income taxes (such as New York) are about to learn, up close and personal, just how much the loss of the deduction for state and local taxes (SALT) will affect their personal tax liability. A little-publicized provision of the New York Tax…
IRS Announces Filing Extension for Furnishing 2018 Forms 1095-B and 1095-C and Continued Good Faith Transition Relief
By Melissa Ostrower on
In IRS Notice 2018-94, the IRS announced an extension for furnishing 2018 IRS Forms 1095-B (Health Coverage) and 1095-C (Employer-Provided Health Insurance Offer and Coverage), from January 31, 2019, to March 4, 2019. The IRS issued this extension in response to requests by employers, insurers, and other providers of health insurance coverage that additional…
IRS Proposed Regulations Implementing Changes To Hardship Distribution Rules
By Joshua Rafsky on
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)…
2019 Cost of Living Adjustments for Retirement Plans
By Keith A. Dropkin on
The Internal Revenue Service recently announced its cost-of-living adjustments applicable to dollar limitations for retirement plans and Social Security generally effective for Tax Year 2019 (see IRS Notice 2018-63). Most notably, the limitation on annual salary deferrals into a 401(k) plan will increase from $18,500 to $19,000. The dollar limits are as follows:
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