IRA

Industry & Regulatory News

Build Back Better Provisions Resurface in White House Budget Proposal

President Biden’s fiscal year 2024 budget includes proposed retirement account restrictions for certain taxpayers — similar to those included in the Build Back Better Act passed by the House in 2021 — but left by the wayside enroute to the passage of the Inflation Reduction Act of 2022.

March 10 2023

Industry & Regulatory News

IRS Finalizes Electronic Filing Requirements for Certain Information Returns

The IRS has released final regulations amending rules intended to increase the filing of electronic returns in accordance with the Taxpayer First Act of 2019.

February 21 2023

Industry & Regulatory News

IRS Announces Deadline Relief for California Severe Storms

The IRS has announced the postponement of certain tax-related deadlines for victims of severe storms, flooding and landslides in California. The tax relief postpones various tax filing deadlines that began on December 27, 2022. Affected individuals and households who reside or have a business in Calaveras, Merced, Monterey, Sacramento, San Joaquin, San Luis Obispo, Santa Barbara, and Santa Cruz counties, as well as taxpayers with records located in the covered area that are needed to meet covered deadlines, qualify for relief.

In addition to extending certain tax filing and tax payment deadlines, the relief includes completion of many time-sensitive, tax-related acts described in IRS Revenue Procedure 2018-58 and Treasury Regulation 301.7508A-1(c)(1). Affected taxpayers with a covered deadline on or after December 27, 2022, and before May 15, 2023, will have until May 15, 2023, to complete the acts. This includes filing Form 5500 series returns that are required to be filed on or after December 27, 2022, and before May 15, 2023.

"Affected taxpayer" automatically includes any individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Those who reside or have a business located outside the covered disaster area, but have been affected by the disaster, may contact the IRS to request relief.

January 25 2023

Industry & Regulatory News

IRS Updates Determination Letter and VCP Submission Information

The IRS has issued Revenue Procedure (Rev. Proc.) 2023-4, which updates guidance on determination letter submission procedures. Changes from the prior year Rev. Proc. 2022-4 include the following.

  • Sections 6, 8, 9, 10, 11, 19, and 20 and Appendix B have been revised to provide the procedures for obtaining a determination letter with respect to a § 403(b) individually designed plan, beginning June 1, 2023. Appendix A adds user fees for these submissions.
  • Sections 6.02 and 16 are revised to provide that Form 5307, Application for Determination for Adopters of Modified Nonstandardized Pre-Approved Plans, and Form 5316, Application for Group or Pooled Trust Ruling, may be submitted electronically beginning June 1, 2023, and must be submitted electronically beginning July 1, 2023, including payment of the user fee.
  • Sections 3 and 31 and  Appendix A reflect the temporary suspension of the opinion letter program for prototype IRAs (Traditional, Roth and SIMPLE IRAs), SEPs (including salary reduction SEPs (SARSEPs)), and SIMPLE IRA plans.
  • Section 02 of this revenue procedure reflects changes to the scope of determination letters.
  • Appendix A has been modified to increase certain user fees.

A new Appendix G has been added which provides a checklist for applications for nonbank trustee approval letters.

January 12 2023

Industry & Regulatory News

Washington Pulse: SECURE 2.0 is Congress’s Retirement Enhancement Encore

Retirement legislation has been a welcome area of bipartisan cooperation in the U.S. Congress, marked by a history of Republican and Democratic bill co-sponsorship and support. A recent example is the Setting Every Community Up for Retirement Enhancement Act—the SECURE Act—passed and signed into law in 2019. The SECURE Act has been hailed as the most important retirement enhancement legislation in more than a decade.

January 12 2023

Industry & Regulatory News

IRS Announces Deadline Relief for California Severe Winter Storms

The IRS has announced the postponement of certain tax-related deadlines for victims of severe winter storms, flooding, and mudslides in California. The tax relief postpones various tax filing deadlines that began on January 8, 2023. Affected individuals and households who reside or have a business in Colusa, El Dorado, Glenn, Humboldt, Los Angeles, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Ventura, Yolo, and Yuba counties, as well as taxpayers with records located in the covered area that are needed to meet covered deadlines, qualify for relief.

In addition to extending certain tax filing and tax payment deadlines, the relief includes completion of many time-sensitive, tax-related acts described in IRS Revenue Procedure 2018-58 and Treasury Regulation 301.7508A-1(c)(1). Affected taxpayers with a covered deadline on or after January 8, 2023, and before May 15, 2023, will have until May 15, 2023, to complete the acts. This includes filing Form 5500 series returns that are required to be filed on or after January 8, 2023, and before May 15, 2023.

"Affected taxpayer" automatically includes any individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Those who reside or have a business located outside the covered disaster area, but have been affected by the disaster, may contact the IRS to request relief.

January 11 2023

Industry & Regulatory News

IRS Final Rule on Electronic Filing Requirements has left OMB

A final rule from the IRS titled “Electronically Filed Returns” has left The Office of Management and Budget.

The IRS released a proposed rule in July 2021 regarding electronic filing requirements for certain information returns, pursuant to the Taxpayer First Act of 2019. The proposed regulations reduce the threshold above which filers must electronically file from 250 to 100 returns for the 2022 calendar year. For filings required after calendar year 2022, the threshold would be further reduced to 10 returns.

A February 2022 publication of the 2022 tax year General Instructions for Certain Information Returns (Forms 1096, 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) released by the IRS indicates its intent to issue regulations that reduce the 250-return requirement for 2022 tax returns, and that if final regulations are issued and effective for 2022 tax returns required to be filed in 2023, IRS will provide further communication regarding the change. Until final regulations are issued, however, the number remains at 250, as reflected in these instructions.

December 27 2022

Industry & Regulatory News

Washington Pulse: Congress Approves Appropriations Bill, Containing the SECURE 2.0 Act of 2022, President’s Signature Expected

The House of Representatives has passed the Consolidated Appropriations Act of 2023, HR 2617, today with a 225-201-1 vote. Included in this bill is the SECURE 2.0 Act of 2022. Following the Senate’s approval on December 22, 2022, the bill will now be presented to the President for his signature.

December 23 2022

Industry & Regulatory News

Senate Approves Appropriations Bill, Containing the SECURE 2.0 Act of 2022, House Vote Expected Next

The Senate has approved the Consolidated Appropriations Act, 2023 (CAA 2023), by a 68-29 vote. Included in this bill is the SECURE 2.0 Act of 2022.

December 22 2022

Industry & Regulatory News

Government Funding Bill, Containing SECURE 2.0, Released

Senate Appropriations Committee Chairman Patrick Leahy (D-VT) has released HR  2617, the Consolidated Appropriations Act of 2023, a $1.7 trillion fiscal year 2023 omnibus appropriations bill, whose provisions will fund government operations for the fiscal year. Included in this legislation, as has been anticipated by many, is the SECURE 2.0 Act of 2022.

The Securing a Strong Retirement Act of 2022 was passed by the House of Representatives earlier this year. The Senate HELP committee approved the RISE & SHINE Act and the Senate Finance committee likewise approved the EARN Act. The House and Senate worked together to combine these bills into the SECURE 2.0 Act that has now been included in the Consolidated Appropriations Act.

Inclusion in the Consolidated Appropriations Act was considered the last opportunity for passage of this retirement legislation in the current Congress. The Consolidated Appropriations Act must now be approved by the House and Senate and signed by the President, for it—and the SECURE 2.0 Act—to become law.

Among the 90 provisions in the SECURE 2.0 Act, some of the significant items include the following.

  • Allowing workers to participate in employer plans after 2 consecutive 12-month periods of 500 hours of service, beginning in 2025
  • Increasing the catch-up contribution limit for select age groups
  • Requiring catch-up contributions to be made on a Roth basis for those earning more than $145,000, except for SIMPLE plans
  • Permitting employer contributions to be made on a pre-tax or Roth basis
  • Increasing the RMD age to 73 in 2023, and age 75 in 2033
  • Expanding automatic enrollment in retirement plans
  • Creating a Retirement Savings Lost and Found
  • Creating new emergency savings accounts linked to individual account plans
  • Allowing student loan payments to be treated as elective deferrals for purposes of matching contributions
  • Modifying the existing saver’s credit to provide for a matching contribution to the individual’s retirement savings vehicle
  • Creating a “starter 401(k) plan” with reduced contribution limits and nondiscrimination safe harbors
  • Increasing the small employer startup credit to 100% for certain employers
  • Increasing the age of disability onset for qualified ABLE programs to age 46
  • Allowing certain rollovers to Roth IRAs from 529 college savings accounts

 

Additional details on the SECURE 2.0 Act will continue to be provided. Visit ascensus.com for the latest information.

December 20 2022