Month: July 2018

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IRS Permits the Use of Forfeitures for QNECs, QMACs and Safe Harbor Contributions

Many employers had long assumed that they could fund contributions to qualified plans made to avoid violating nondiscrimination rules from employee forfeiture accounts. Recently, the IRS finalized helpful new guidance to employers clarifying that forfeitures can be used fund these contributions. QNECs, QMACs and Safe Harbor Contributions Tax-qualified defined contribution plans (e.g., 401(k) and profit …

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Time for Non-Profits to Update Their 403(b) Retirement Plans

Non-profit entities, including schools and universities, that sponsor 403(b) retirement plans should begin the process of restating their plans to comply with current law.  This is the first restatement cycle since the December 31, 2009 deadline for sponsors of 403(b) plans to adopt written plan documents.  A 403(b) plan is similar to a 401(k) plan …

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Signs Point to Yes: The IRS Advisory Committee Drops Hints That the Qualified Retirement Plan Determination Letter Program Might Return in Some Form

For many years, plan sponsors could regularly get a determination letter from the IRS to ensure that their individually-designed qualified retirement plan met all of the requirements for favorable tax treatment. However, in 2017 the IRS ended that practice. Since that time, plan sponsors have had no mechanism by which to confirm that their plans …

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Qualified Transportation Fringe Benefits No Longer Deductible for Employers

In the past, employers have been able to deduct expenses related to “qualified transportation fringe benefits” (“QTFBs”) such as qualified parking, transit passes, transportation in commuter highway vehicles, or qualified bicycle commuting reimbursements. Pub. L. No. 115-97, commonly referred to as the “2017 Tax Act” or the “Tax Cuts and Jobs Act” (“TCJA”), however, has …

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ACA Employer Penalty Tax Update: Responding to Letter 227

Many applicable large employers received an unpleasant surprise earlier this year when they received Letter 226-J, which imposed an employer shared responsibility payment (ESRP) under Section 4980H of the Internal Revenue Code on Forms 1094-C and/or 1095-C filed for the 2015 calendar year.  Employers were required to respond to Letter 226-J within a short 30-day …

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