IRS

The IRS today issued Notice 2022-27, extending guidance released previously under Notice 2020-42 and extended by Notice 2021-03 and Notice 2021-40. The Notice provides additional 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.

The IRS has issued a news release announcing the postponement of certain tax-related deadlines for victims of wildfires and straight-line winds in New Mexico. The tax relief postpones various tax filing deadlines that began April 5, 2022.

May 3, 2022 - The Department of Treasury and Internal Revenue Service have released proposed regulations to update the mortality tables that are used to calculate minimum required contributions for single-employer defined benefit pension plans. The regulations are proposed to be first effective for plan years beginning in 2023.

Comments must be received by June 9, 2022. A public hearing on these proposed regulations has been scheduled for June 28, 2022. The regulations will be reviewed, and additional details provided as warranted.

May 3, 2022 - The IRS has issued Revenue Procedure 2022-24, providing inflation-adjusted amounts for health savings accounts (HSAs) for calendar year 2023. Maximum annual HSA contributions will rise from $3,650 to $3,850 for those with self-only insurance coverage, and from $7,300 to $7,750 for those with family coverage.

Minimum deductible amounts for qualifying high deductible health plans will increase from $1,400 for self-only coverage to $1,500, and from $2,800 to $3,000 for a family plan. Maximum annual out-of-pocket amounts under self-only coverage will rise from $7,050 to $7,500, and from $14,100 to $15,000 for family coverage.

Employers of all types have expressed interest in learning more about multiple employer plans (MEPs). But the unified plan rule, sometimes known as the “one bad apple rule,” has discouraged some employers from pursuing MEP participation.

April 29, 2022 - The IRS has issued a revised 2021 Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). The updated publication appears to correct several errors in the life expectancy tables found in Appendix B. The 2021 tax year publication reflects new life expectancy and distribution period tables that are applicable to distribution calendar years beginning on or after January 1, 2022.

The IRS has released a revised Section 403(b) Pre-Approved Plans Listing of Required Modifications and Information Package (April 2022), which includes sample plan provisions to assist drafters of 403(b) pre-approved plan documents in satisfying the requirements of Internal Revenue Code Section 403(b) and associated regulations. This revised information package consists of five sections with sample provisions related to 1) all 403(b) plans and elective deferral only arrangements, 2) contributions other than elective deferrals, 3) standardized plan provisions, 4) nonstandardized plan provisions, and 5) retirement income accounts. This guidance has been updated to accommodate the 2022 Cumulative List of Changes in Section 403(b) Requirements for Section 403(b) Pre-approved Plans in Notice 2022-8, which was previously announced.

The IRS has issued Revenue Ruling 2022-9, which contains the applicable federal rates (AFR) for May 2022. These rates are used for such purposes as calculating distributions from retirement savings arrangements that meet the requirements for substantially equal periodic payments (a 10 percent early distribution penalty tax exception), also referred to as “72(t) payments.”

The IRS has issued Notice 2022-16, which contains updated guidance on factors used in certain defined benefit (DB) pension plan minimum funding and present value calculations. Updates include the corporate bond monthly yield curve, the corresponding spot segment rates for April used under Internal Revenue Code Section (IRC Sec.) 417(e)(3), and the 24-month average segment rates under IRC Sec. 430(h)(2). IRC Sec. 417 contains definitions and special rules for minimum survivor annuity requirements in DB plans. IRC Sec. 430 addresses minimum funding standards for single-employer DB plans.

The IRS has issued a news release announcing the postponement of certain tax-related deadlines for victims of severe storms, flooding, and landslides in Puerto Rico. The tax relief postpones various tax filing deadlines that began February 4, 2022. Affected individuals and households who reside or have a business in municipalities of Cataño, Dorado, Toa Baja, Vega Alta, and Vega Baja 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 February 4, 2022, and before June 15, 2022, will have until June 15, 2022, to complete the acts. This includes filing Form 5500 series returns that are required to be filed on or after February 4, 2022, and before June 15, 2022.

"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.