2024

Clarification of substantially equal periodic payment rule

Current law imposes a 10% additional tax on early distributions from tax-preferred retirement accounts, but an exception applies to substantially equal periodic payments that are made over the account owner’s life expectancy. This provision provides that the exception...

Increased time to adopt beneficial plan amendments

Discretionary amendments that increase participants’ benefits or add nonelective contributions may be adopted by the due date of the employer’s tax return, plus extensions, rather than by the end of the plan year in which the amendment is effective. Note that this...

Hardship withdrawal rules

Under current law, the distribution rules for 401(k) and 403(b) plans are treated differently. This provision conforms the 403(b) rules to the 401(k) rules whereby 403(b) plans may now make hardship distributions from the same contribution sources as 401(k) plans, and...

Reform of family attribution rule

The aggregation rules that determine the degree of common ownership in a business have been updated in two situations: Inequities addressed where spouses with separate businesses reside in a community property state versus those who reside in separate property states...

Roth plan distribution rules

Under current law, RMDs are required to begin prior to the death of the owner of a Roth account in employer sponsored retirement plans (e.g.: 401(k) plans), but RMDs are not required in Roth IRAs. Beginning January 1, 2024, the pre-death distribution requirement for...

Expansion of the Employee Compliance Resolution System (EPCRS)

The law expands EPCRS to allow more types of errors to be corrected under the self-correction method. There is no time limit unless the self-correction is not completed within a reasonable time period after the failure is identified or the IRS catches the failure...