On March 5, 2018, the IRS announced adjustments – effective immediately – to various annual limitations already in place for 2018. One such adjustment is to the maximum annual health savings account contribution for a family with high deductible health coverage. Previously set at $6,900 for 2018, the IRS has lowered the limit to $6,850,
The Tax Cuts and Jobs Act (Tax Act) did not directly modify the rules governing hardship withdrawals from 401(k) plans. However, one change enacted by the Tax Act does necessitate a careful review of 401(k) plan hardship withdrawal language and could impact the administration of hardship withdrawal requests. Further, the Bipartisan Budget Act of 2018,
As a follow up to our previous post, the Department of Labor announced earlier this month that its revised disability claims procedure regulations will indeed take effect on April 1, 2018. The DOL stated that it received few substantive comments with quantitative data on the burdens imposed by the regulations. Moreover, the DOL found
Although retirement plans and schemes are generally jurisdiction specific creatures, the governance of the retirement plans and schemes of multinational companies is very much a global issue. Retirement funds, whether defined contribution plans or defined benefit plans, are essentially large pots of money (frequently in the billions of dollars) located in jurisdictions around the world.
After working to reconcile differences between the two Tax Cuts and Jobs Act bills, the Senate and House Conference Committee reached a tentative agreement on Wednesday, December 13. Although there is not yet a published version of the Conference Committee’s bill, both the Senate and House had proposed adding a new Section 4960 to the Internal Revenue Code (Code) which would, effective for taxable years beginning after December 31, 2017, impose an excise tax of 20% on certain compensation paid to a covered employee by a tax-exempt organization in excess of $1,000,000 and for certain excess parachute payments. The excise tax would be payable by the tax-exempt organization. This post summarizes key provisions of the proposed excise tax provision.
General Rule: Tax-exempt organizations will be required to pay a 20% excise tax equal to 20% of the sum of (i) remuneration paid in excess of $1,000,000 during a taxable year to a covered employee and (ii) any excess parachute payment paid to the employee by such organization during such year. The proposed statutory text notes, though, in relevant part that any such amounts shall be considered “paid” for this purpose when there is no substantial risk of forfeiture.
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This post has been updated to reflect subsequent changes made by the IRS, as further described in this post.
The Internal Revenue Service has released its annual cost-of-living adjustments applicable to employee benefit plans. A year-to-year comparison of limitations applicable to plan sponsors can be found here: Mayer Brown 2018 Annual Limitations Chart 2018
With all of the press about the new tax reform legislation and the proposed changes to the corporate tax rates, many companies might be considering strategies for accelerating deductions into earlier years to take advantage of those deductions in a year when the tax rates may be higher than in future years. One strategy