Understanding Employee Benefits

IRS Says: Be Careful If You Outsource Payment

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The IRS recently issued a fact sheet containing tips for employers who outsource payroll duties. In the fact sheet, the IRS reminded employers that they remain responsible for paying withholding taxes even if the employer has paid the payroll provider, but the payroll provider has failed to pay the money... Read More

Topics: Payroll

Supreme Court Strikes Down Federal Defense of Marriage Act – Open Questions for Benefit Plan Sponsors

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On June 26, 2013, in a 5-4 vote the U.S. Supreme Court ruled that the 1993 Defense of Marriage Act (DOMA) was unconstitutional as a violation of Fifth Amendment guarantees of equal protection and equal liberty. The case, United States v. Windsor No.12-307(US June 26, 2013)  http://www.supremecourt.gov/opinions/12pdf/12-307_6j37.pdf dealt with the... Read More

Topics: Cafeteria Plans, ERISA and Other Benefits Litigation, Health Plan, Payroll, Retirement Plans, Welfare Plans

The White House Blog: Employer Mandate Under the Affordable Care Act Delayed for One Year

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On July 2 the White House announced that it is delaying the enforcement of the employer mandate that it provide health care coverage to employees or pay a penalty (the “play or pay” provisions) until 2015. http://www.whitehouse.gov/blog/2013/07/02/we-re-listening-businesses-about-health-care-law. According to the White House Blog, the other provisions of the Affordable Care... Read More

Topics: Health Care Reform, Health Plan, Payroll, Welfare Plans

Nonresident Employee Avoids New York Taxes on Deferred Compensation Payment

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A taxpayer we will call John worked for a savings bank in New York that was acquired by Washington Mutual Bank. John participated in the New York bank’s supplemental executive retirement plan (SERP) and its deferred compensation plan, both of which were nonqualified deferred compensation plans. When Washington Mutual Bank... Read More

Topics: Deferred Compensation and 409A, Executive Compensation, Payroll

Section 409A Tax Assessed on Discounted Stock Options – Taxpayer Sues for Refund in Federal Court of Claims

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Code Section 409A which was effective in January 1, 2005, provides strict rules that must be applied to most deferred compensation arrangements accruing benefits after the effective date. Failure to comply with the Code and the applicable Treasury Regulations can result in a 20% surtax plus interest on the amounts... Read More

Topics: Deferred Compensation and 409A, ERISA and Other Benefits Litigation, Executive Compensation, Payroll

Roth Conversions for Everyone

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The recent “fiscal cliff” legislation, the American Taxpayer Relief Act 2012 includes a revenue raising idea for the government – more Roth conversions. The new provision would allow private company defined contribution plans (i.e., 401(k) and profit sharing plans); Section 403(b) plans for tax exempts and governmental 457(b) plans to... Read More

Topics: Payroll, Retirement Plans