Industry & Regulatory News

Industry & Regulatory News

Industry & Regulatory News
Bill Introduced to Expand 529 Plan Eligible Expenses

Senator Ted Cruz (R-TX) has reintroduced the Student Empowerment Act. The bill would allow public, private, and religious school students to use 529 savings accounts to cover K-12 expenses—including expenses related to tutoring, testing fees, and educational therapies for students with disabilities.

January 31 2023
Industry & Regulatory News
Employer Tax Credits

This credit applies to qualified plans (defined contribution and defined benefit plans under IRC Sec. 401(a) and 403(a)), and SEP and SIMPLE plans.

January 30 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
Legislation Proposed to Expand HSA Access

Representative Andy Biggs (R-AZ) has introduced H.R. 107, the Freedom for Families Act, which proposes the following.

  • Provide that distributions from health savings accounts (HSAs) during periods of qualified caregiving are not includible in gross income
  • Remove the requirement that an individual be covered under a high deductible health plan in order to contribute to an HSA
  • Increase the annual contributions limits to $9,000 for single coverage and $18,000 for family coverage

Under the proposal, periods of qualified caregiving are defined as any period during which an individual is on leave or not employed because of the following reasons.

  • Birth of the employee’s child and the period required to care for such child
  • Placement of a child with the employee for adoption or foster care
  • Caring for the employee’s spouse, son, daughter, or parent, because of a serious health condition
  • A serious health condition that makes the employee unable to perform the functions of her position
  • Certain emergencies as a result of covered active duty or notification of order to covered active duty in the Armed Forces by the employee’s spouse, son, daughter, or parent

The bill has been referred to the House Committee on Ways and Means.

January 23 2023
Industry & Regulatory News
IRS Issues Yield Curves and Segment Rates for DB Plan Calculations

The IRS has issued Notice 2023-12, 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 January 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.

January 18 2023
Industry & Regulatory News
IRS Announces Applicable Federal Rates for February

The IRS has issued Revenue Ruling 2023-03, which contains the applicable federal rates (AFR) for February 2023. 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."

January 18 2023
Industry & Regulatory News
PBGC Announces 2023 Inflation Adjustments for Civil Penalties

The Pension Benefit Guaranty Corporation has published in the Federal Register inflation-adjusted penalty amounts for failure to provide certain notices or other material information and for failure to provide certain multiemployer notices.

  • Daily penalty under ERISA Section 4071 rises from $2,400 to $2,586
  • Daily penalty under ERISA Section 4302 rises from $320 to $345

These adjustments for 2023 are made under the authority of the Federal Civil Penalties Inflation Adjustment Act and are in effect for any of the described penalties that are assessed after January 12, 2023.

January 17 2023
DOL
Industry & Regulatory News
Hardship Distributions May Be Permitted for Alabama Severe Storms

The Federal Emergency Management Agency (FEMA) has issued a disaster declaration for severe storms, straight-line winds, and tornadoes in Alabama, for January 12, 2023.

Employers with qualified retirement plans may allow participants to take hardship distributions if they have incurred expenses and losses because of a FEMA-declared disaster, and their principal residence or place of employment at the time of the disaster is located in an area designated by FEMA as eligible for individual disaster assistance.

If the employer permits hardship distributions for expenses and losses related to a federally declared disaster, participants can check fema.gov/locations to determine if they are located in a disaster area designated for individual assistance.

The IRS may also issue relief related to this disaster for certain tax-related deadlines. Additional information can be found at irs.gov/newsroom/tax-relief-in-disaster-situations and will be announced here if such relief is granted.

January 17 2023
Industry & Regulatory News
Hardship Distributions May Be Permitted for California Winter Storms

The Federal Emergency Management Agency (FEMA) has issued a disaster declaration for severe winter storms, flooding, landslides, and mudslides in California, starting on December 27, 2022 (there is no end date at this time).

Employers with qualified retirement plans may allow participants to take hardship distributions if they have incurred expenses and losses because of a FEMA-declared disaster, and their principal residence or place of employment at the time of the disaster is located in an area designated by FEMA as eligible for individual disaster assistance.

If the employer permits hardship distributions for expenses and losses related to a federally declared disaster, participants can check fema.gov/locations to determine if they are located in a disaster area designated for individual assistance.

The IRS may also issue relief related to this disaster for certain tax-related deadlines. Additional information can be found at irs.gov/newsroom/tax-relief-in-disaster-situations and will be announced here if such relief is granted.

January 17 2023
Industry & Regulatory News
Hardship Distributions May Be Permitted for Georgia Severe Weather

The Federal Emergency Management Agency (FEMA) has issued a disaster declaration for severe weather in Georgia, for January 12, 2023.

Employers with qualified retirement plans may allow participants to take hardship distributions if they have incurred expenses and losses because of a FEMA-declared disaster, and their principal residence or place of employment at the time of the disaster is located in an area designated by FEMA as eligible for individual disaster assistance.

If the employer permits hardship distributions for expenses and losses related to a federally declared disaster, participants can check fema.gov/locations to determine if they are located in a disaster area designated for individual assistance.

The IRS may also issue relief related to this disaster for certain tax-related deadlines. Additional information can be found at irs.gov/newsroom/tax-relief-in-disaster-situations and will be announced here if such relief is granted.

January 17 2023