Dec 19, 2017 3:00:00 PM
2017 Form 5500 – No Big Changes
The IRS has released advance copies of the 2017 Form 5500 and instructions. The previous year’s optional compliance questions are gone, along with information about paid preparers. We don’t expect to see a major revision for several years.
Tax Reform
As of this writing, Congress is still working out tax reform legislation. The good news so far is that we’re not seeing anything that negatively impacts ESOPs.
Minimum Distributions and Missing Participants
Sep 8, 2017 2:00:00 PM
Given the tremendous devastation caused by Hurricane Harvey, the IRS has issued two relief declarations that may be of interest to plan sponsors. The first extends to January 31, 2018 the time for filing Form 5500 and certain other returns that would otherwise become due for filing between August 23, 2017 and January 31, 2018. Affected employers are those in the counties covered by the relief announcement (listed on the IRS website) and those who are unable to complete filings because they can’t obtain required filing data from a bank or other service provider in the covered areas. The IRS news release is at https://www.irs.gov/newsroom/tax-relief-for-victims-of-hurricane-harvey-in-texas.
May 22, 2017 3:51:20 PM
Hardship Withdrawals
In an April 2015 article, the IRS said plan sponsors must maintain supporting documentation for hardship withdrawals. The IRS asserted that it was not sufficient to rely on a participant’s self-certification that criteria for a hardship distribution had been met. The IRS also said that a plan sponsor’s failure to maintain hardship documentation was a plan qualification issue. That last assertion drew criticism from some daily recordkeepers who were relying on participant electronic certification for hardship withdrawals.
Feb 9, 2017 10:27:15 AM
Good News for Safe Harbor 401(k) Plans
The IRS has issued a proposed regulation that will permit forfeitures to be used to satisfy safe harbor contributions. This is welcome news for 401(k) safe harbor plans that hold employer match or discretionary profit sharing money that was subject to a vesting schedule when contributed to the plan. While many 401(k) plans permit forfeitures to be used for plan expenses or other non-safe harbor employer allocation purposes, the proposed regulation gives plan sponsors another option – use forfeitures to fund safe harbor contributions.
Nov 15, 2016 1:19:55 PM
Some ESOPs permit participants to take a lump sum distribution from their accounts. Some may provide an option for all or a portion of the distribution to be paid in shares of Employer stock.
Topics: Tax Savings, Distributions
Nov 15, 2016 1:07:28 PM
IRS Provides Help with Rollovers
If you receive a distribution check and fail to roll over the payment to an IRA or other plan within 60 days, you may be in luck. The IRS has provided a self-certification procedure for those who inadvertently fail to complete a rollover within 60 days. Revenue Procedure 2016-47 provides a sample self-certification letter that a taxpayer can use to notify an IRA or other institution that he qualifies for a waiver of the 60-day rollover requirement. The waiver applies if one or more of 11 circumstances apply, including:
Form 5500
Jul 20, 2016 11:23:38 AM
The IRS, Department of Labor (DOL) and Pension Benefit Guaranty Corporation (PBGC) have decided that Form 5500 requires a major update. The proposed revisions will be published July 21, followed by a 75-day comment period. The revised Form 5500 is targeted for rollout with the 2019 filing year. According to a DOL press release, proposed revisions are intended to:
