UPDATE: The Massachusetts Department of Family and Medical Leave announced that along with the start of contributions being delayed from July 1, 2019, to Oct. 1, 2019, the following aspects of the program are also delayed: – the deadline for providing notice to employees is delayed from June 30, 2019, to Sept. 30, 2019; – the deadline for applications for an exemption from the state program is delayed from Sept. 20, 2019, to Dec.…

Identifying an employer’s highly compensated employees is crucial to the administration of qualified retirement plans, as well as 403(b) plans that provide employer contributions.  This post provides an overview of the rules for determining who is a highly compensated employee. The dollar amount used in this post is the 2018 inflation adjusted dollar amount because that is the amount that is used to determine whether an individual is a highly compensated employee for the 2019…

The Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) includes a provision that changed the rollover rules for certain plan loan offset distributions and that may not be well known to retirement plan sponsors and participants. Money purchase, profit sharing, 401(k) and 403(b) plans may make loans available to plan participants.  If a participant with an outstanding loan terminates employment and fails to repay the loan in accordance with its terms (including repayment…

Newly published Revenue Procedure 2019-19 modifies and supersedes prior IRS guidance regarding the Employee Plans Compliance Resolution System (EPCRS) to allow plan sponsors to self-correct an expanded number of problems that may affect retirement plan operations or documents. The new guidance, which took effect April 19, 2019, provides a significant opportunity for plan sponsors to correct loan defaults and other minor operational failures without going through the expensive and often time consuming voluntary correction program…

Deferred compensation payments are due to one of your former executives, but the former executive is nowhere to be found. You know that the IRS has strict timing rules for payments subject to Code Section 409A (but maybe not as strict as you think). The end of the tax year is approaching fast. What to do? Missing participants can be a problem for benefit plan sponsors in a variety of contexts. Sponsors of qualified…

IRS Notice 2019-09 provides guidance intended to help “applicable tax-exempt employers” determine whether compensation paid to their most highly compensated employees will be subject to the 21 percent excise tax imposed under Code Section 4960.  Notice 2019-09 is indeed helpful to those of us who have to interpret the provisions of Code Section 4960.  But tax-exempt employers subject to Code Section 4960 have serious work to do in order to comply with these relatively new…

Every IRS Form 1094/1095 filing season (roughly January and February of each year), we receive questions on reporting for expatriate employees.  The most common questions: do we need to furnish a Form to expat employees working in the U.S. (sometimes called “inpats”) who are covered under a regular or expat plan, and if so which Form?  The rule is fairly straightforward: in general any employee who works in the U.S. at least 30 hours per…