There are many important tax changes taking effect in 2015. They are the result of the Tax Increase Prevention Act of 2014 (TIPA) as well as other tax legislation, or are triggered by effective dates in regs, rulings, and other guidance.

Also, a number of important final regs go into effect in 2015. This article highlights key non-inflation-indexed tax changes affecting qualified retirement plans.

Employee retirement benefit plan returns must be filed electronically.
Final regs require a plan administrator (or, in certain cases, an employer maintaining a plan), who is required by the Code or regs to file at least 250 returns, to use magnetic media to file certain statements, returns, and reports under Code Sec. 6057 (filing requirements for deferred vested retirement benefits), Code Sex. 6058 (filing requirements for information required in connection with deferred compensation plans), and Code Sec. 6059 (filing requirements for periodic actuary reports).

The regs apply to employee retirement benefit plan statements and notifications required to be filed under Code Sec. 6057 for plan years that begin on or after Jan. 1, 2014, but only for filings with a filing deadline (not taking into account extensions) on or after July 31, 2015. For example, a plan with a short 2014 plan year ending Nov. 30, 2014, would have a filing deadline of June 30, 2015, and thus wouldn’t be required to file electronically for that plan year.

For employee retirement benefit plan returns and reports required to be filed under Code Sec. 6058 and code Sec. 6059, the regs apply for plan years that begin on or after Jan. 1, 2015 , but only for filings with a filing deadline (not taking into account extensions) after Dec. 31, 2015.

Final regs toughen rules for matching contributions.
Final regs modify the rules that apply to mid-year amendments reducing or suspending safe harbor matching contributions, so that the requirements that apply to a mid-year reduction or suspension of safe harbor nonelective contributions are not stricter than those that apply to a mid-year reductions or suspension of safe harbor matching contributions.

Thus, safe harbor matching contributions may be reduced or suspended under a mid-year amendment only if either (i) the employer is operating at an economic loss as described in Code Sec. 412(c)(2)(A), or (ii) the notice provided to participants before the beginning of the plan year discloses that the contributions might be reduced or suspended mid-year, that participants will receive a supplemental notice if that occurs, and that the reduction or suspension will not apply until at least 30 days after the supplemental notice is provided. This change is first effective for plan years beginning on or after Jan. 1, 2015.

Final regs on retirement plan payments for accident, health, and disability insurance. Final regs effective Jan. 1, 2015 (but they may be applied earlier) provide that payments from a qualified defined contribution plan to pay a participant’s

  • Accident and health insurance premiums are taxable distributions to the participant unless a statutory exception applies
  • Disability insurance premiums aren’t taxable distributions if: premiums for the disability insurance contract are paid directly from the plan; the plan receive the benefit payments as required by the disability insurance contract; benefit payments under the contract are paid because of tan employee’s inability to continue employment with the employer because of disability; and the benefit payments to a participant’s account aren’t more than a reasonable expectation of what the participant would have received as an annual contribution during the disability period, reduced by any other contributions.

Contact us if you have any questions about retirement plan changes 417-881-0145.