IRA

Industry & Regulatory News

IRS Releases 2021 Tax Year IRA and Retirement Plan Reporting Forms 1099-R, 5498

The IRS has posted at its website the 2021 tax year version of Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., and Form 5498, IRA Contribution Information. As the title implies, Form 1099-R is filed by financial organizations and service providers to report to account owners and the IRS distributions from tax-qualified retirement savings arrangements. Form 5498 more narrowly reports IRA-related information—including contributions to IRAs, SEP and SIMPLE IRA employer plans, end-of-year fair market values, rollovers, conversions, recharacterizations, etc.

January 02 2021

Industry & Regulatory News

Despite Some Confusion, December 30, 2020, Remains the Deadline for Special Tax Benefits of CARES Act Retirement Plan Distributions

Today is the last day for eligible taxpayers to take IRA and employer-sponsored retirement plan distributions that qualify for special tax benefits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This legislation was enacted in March 2020 as a response to the coronavirus (COVID-19) pandemic. There has been some industry and media confusion over whether more recent pandemic relief legislation has provided an extended opportunity to qualify for such benefits, but it has not.

December 30 2020

Industry & Regulatory News

Investment Advice Fiduciary Class Exemption Published, Effective Date Set

Appearing in today’s Federal Register is Department of Labor Employee Benefits Security Administration (EBSA) Prohibited Transaction Exemption (PTE) 2020-02, which will provide guidance to investment advisors who counsel retirement and other investors. As noted in an Ascensus December 16 announcement, the guidance completes a process that began with 2016 regulations and exemptions issued under the Obama administration. Those regulations and exemptions were subsequently vacated in 2018 by a federal appeals court.

December 19 2020

Industry & Regulatory News

DOL Issues Investment Advice Fiduciary Class Exemption

The Department of Labor’s (DOL’s) Employee Benefits Security Administration (EBSA) has issued a long-awaited class exemption, Prohibited Transaction Exemption (PTE) 2020-02, providing guidance to investment advisors who counsel retirement and other investors. The guidance completes a process that began with 2016 regulations and exemptions issued under the Obama administration, which were vacated in 2018 by a federal appeals court, and a promise by new DOL leadership under President Trump to issue new guidance in its stead. Yesterday’s issuance of a news release, fact sheet, and PTE 2020-02 completes that process.

December 16 2020

Industry & Regulatory News

House Bill Would Extend, Expand Tax Benefits for CRDs

Rep. Sean Maloney (D-NY) has introduced H.R. 7645, legislation that would extend the time period for taxpayers to withdraw coronavirus-related distributions (CRDs) from retirement savings arrangements and receive the special tax benefits that CRDs provide. Certain withdrawals could be tax-free under the legislation.

July 17 2020

Industry & Regulatory News

Washington Pulse: The DOL’s New Proposal to Regulate Investment Advice

Few aspects of retirement plan governance have been as controversial as regulating investment advice. Exactly what obligation—if any—does an investment professional have to provide impartial, conflict-free advice to savers and retirees?  When do financial professionals step over the boundary that can make them a fiduciary, with the ethical and legal obligations that come with this duty?

July 10 2020

Industry & Regulatory News

Relief for Certain Retirement Plan Consent Requirements

The Internal Revenue Service (IRS) today issued Notice 2020-42, in which the IRS provides temporary relief from the physical presence requirements for certain elections that are made by participants and beneficiaries in qualified retirement plans and other tax-favored retirement arrangements. This includes signatures of those making an election that ordinarily would need to be witnessed in the physical presence of a plan representative or notary public, including spousal consent and certain forms of distribution from retirement plans.

June 05 2020

Industry & Regulatory News

House Passes Bill to Expand Paycheck Protection Program

The U.S. House of Representatives passed by a 417-1 margin on Thursday, May 28, the Paycheck Protection Program Flexibility Act of 2020. This legislation would modify certain core terms of this Small Business Administration (SBA) emergency lending program. The Paycheck Protection Program (PPP) was created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020. Under the program, qualifying small businesses may apply for loans from the SBA to retain employees on their payrolls, and—especially attractive to business owners—the loans are forgiven if certain conditions are met.

May 29 2020

Industry & Regulatory News

IRS Provides Welcome Deadline Relief for Savings Arrangement Reporting, Limited Additional Extensions

On May 28, 2020, the IRS issued limited additional relief that extends deadlines for certain time-sensitive actions related to tax-advantaged savings arrangements. Most awaited was an extension for providing information returns for IRAs, health savings accounts (HSAs), Archer medical savings accounts (MSAs), and Coverdell education savings accounts (ESAs). These information returns are Form 5498, IRA Contribution Information, Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, and Form 5498- ESA, Coverdell ESA Contribution Information.

May 28 2020

Industry & Regulatory News

House Passes More Pandemic Aid; Quick Senate Action Not Expected

The House of Representatives late Friday passed H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, providing additional aid to many who are adversely affected by the novel coronavirus (COVID-19) pandemic. The bill also contained non-COVID-19-related provisions considered likely to prove controversial in the Senate.

May 18 2020