As was previously announced in 2015, effective as of January 1, 2017, the Internal Revenue Service (“IRS”) is eliminating its five year staggered determination letter cycle for individually designed retirement plans. Plans in the current cycle (Cycle A) still may submit their plans for determination letters on or before January 31, 2017. Pursuant to Revenue […]
Last summer the Internal Revenue Service updated its Audit Techniques Guide (“ATG”) for nonqualified deferred compensation arrangements. While the ATG provides little instruction on how the IRS will review nonqualified deferred compensation arrangements for compliance with Section 409A of the Code, it provides a helpful reminder of some of the other rules applicable to nonqualified […]
The 2015 Form 5500 added some new optional compliance questions for the 2015 Forms 5500 and 5500-SF. In December 2015, the IRS issued frequently asked questions on the new compliance questions and strongly encouraged plan sponsors to answer the questions. On February 18, the IRS changed course and announced that plan sponsors should not complete […]
Many employers struggled to furnish correct Forms 1095-C to employees by the March 31, 2016 deadline. Section 6721(a)(2) of the Internal Revenue Code provides penalties for failure to furnish Forms 1095-C to individuals by the deadline. Although the presumptive penalty is $250 for each delinquent or incorrect return, the penalty amount may be reduced if […]
The $1,000,000 limitation on deductions imposed by Section 162(m) of the Internal Revenue Code applies to “covered employees.” In Notice 2007-49, the IRS defined the term “covered employees” as follows: “The IRS will interpret the term “covered employee” for purposes of § 162(m) to mean any employee of the taxpayer if, as of the close of […]
Mid-year changes to safe harbor 401(k) plans have long been thought to be available in only very limited circumstances. However, the IRS recently released guidance in Notice 2016-16 that significantly increases the scope of permissible mid-year changes to safe harbor 401(k) plans. Generally, safe harbor 401(k) plan provisions must be adopted (and participants must be […]
Last July, in Announcement 2015-19, the IRS announced that it was terminating its determination letter program for individually designed qualified retirement plans, other than for new or terminating plans. This week, in Notice 2016-03 the IRS provided us with specific transition guidance on the winding down of its program. Specifically, the IRS announced that: Controlled […]
The IRS has announced cost of living adjustments for health flexible spending accounts (“health FSAs”) in Section 125 cafeteria plans, contributions to health savings accounts (“HSAs”), out-of-pocket maximums under high deductible health plans (“HDHPs”) and qualified transportation plan benefits for 2016. For 2016, the health FSA limit on voluntary employee salary reduction contributions will remain […]
As explained in my previous blog, Code Sections 6055 and 6056, added by the Affordable Care Act (“ACA”), require all employers (even small employers) sponsoring self-funded health plans and large employers to file information returns with the IRS and furnish statements to employees concerning the health coverage offered or provided to these employees and their […]
In Announcement 2015-19, the IRS announced the elimination of the five year remedial amendment cycle for individually designed retirement plans effective as of January 1, 2017. This means that after January 1, 2017, individually designed retirement plans will no longer be eligible to receive favorable determination letters every five years. The Announcement leaves the current […]
