Employee Benefits Legal Resource Site

Carol V. Calhoun

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“Effect of the Tax Cuts and Jobs Act of 2017 on Nonprofits and Governments,” PowerPoint now available
(Posted on February 15, 2018 by )

The Tax Cuts and Jobs Act of 2017 made a number of changes affecting the compensation and benefits that governmental, church, and other tax-exempt organizations can provide to their employees. Given the short time between introduction and passage of the Act, it is not surprising that many of the new provisions are unclear in their application. Moreover, some of them may produce unintended consequences for these organizations.

As part of a symposium on “Recent Developments in Benefits/Executive Compensation Affecting Tax Exempt Organizations,” Carol V. Calhoun gave a presentation on the ways in which the Tax Cuts and Jobs Act of 2017 will affect the compensation and benefits of such organizations. A copy of the PowerPoint for her speech can be found at this link.

“Overview of the Tax Cuts and Jobs Act: What Individuals and Business Owners Need to Know,” PowerPoint now available
(Posted on February 1, 2018 by )

The PowerPoint slides for the presentation entitled “Overview of the Tax Cuts and Jobs Act: What Individuals and Business Owners Need to Know,” given at the offices of Venable LLP on February 1, 2018, are now available at this link.




Nonprofits and Governments Face Compensation and Benefits Issues under the New Tax Law
(Posted on January 11, 2018 by )

The recently passed tax bill imposes a 21% excise tax on excess compensation and excess severance benefits of certain executives of nonprofit and governmental employers. The provision has a substantial impact on the compensation and benefits that such organizations can provide for their executives. Moreover, the determination of which employers, and which executives, are covered includes several traps for the unwary.

Read more.

New chart: Pre-approved Plan Eligibility Checklist
(Posted on January 5, 2018 by )

Lexis Practice AdvisorThe IRS maintains pre-approved plan programs (1) for retirement plans described in I.R.C. § 401(a) (qualified plans), and (2) for annuity contracts or custodial accounts described in I.R.C. § 403(b) (403(b) plans). A new chart shows what types of plans are and are not eligible to use the pre-approved plan program.

Read more.

New article: Executive Compensation Arrangements for Tax-Exempt Organizations
(Posted on January 2, 2018 by )

Lexis Practice AdvisorTax-exempt organizations face special legal challenges in developing compensation packages for their executives. A new article published in the Lexis Practice Advisor provides practical guidance on developing benefits for executives of nonprofits.

Read more.

Navigating Pension and Annuity Payments: General Rule and Taxation Guidelines
(Posted on December 18, 2017 by )

Lorman Distinguished Faculty MemberA 76-page PowerPoint presentation from a live Lorman Telecom webinar, “Navigating Pension and Annuity Payments: General Rule and Taxation Guidelines,” is now available by clicking here.

The webinar covered distributions from qualified plans (pension, profit sharing, stock bonus, and 401(k), including Roth accounts), IRAs (regular and Roth), and commercial annuities. Topics covered:

  • Sources of distributions (employer contributions, employee deferrals, Roths, after-tax contributions, and rollovers);
  • Restrictions on how early and how late distributions can be taken;
  • Penalties on early withdrawals;
  • Taxation of lump sum distributions;
  • Taxation of withdrawals and partial distributions;
  • Taxation of annuities and other periodic payments;
  • Plan withholding and reporting; and
  • Participant reporting.

A download of the program and other information can be found at this link, which also contains a 50% discount code.

Social Security Wage Base for 2018 Updated
(Posted on November 27, 2017 by )

SSALogoThe Social Security Administration has now announced that the wage base (the maximum amount subject to Social Security taxes) for 2018 will be only $128,400, rather than the $128,700 it had announced in October.

A chart showing Social Security limits from 1996 through 2018 can be found at this link.

2018 IRS Benefits & Contributions Limits Announced
(Posted on October 19, 2017 by )

irsOn October 19, 2017, the IRS issued IRS Notice 2017-64, announcing the changes in pensions and benefits limits for 2018. The maximum limits on employee pretax contributions to 401(k), 403(b), and 457(b) plans (without catch-ups) increased to $18,500, the maximum limit on annual additions (primarily to defined contribution plans) rose from $54,000 to $55,000, and the maximum limit on benefits (when expressed as an annual benefit) under a defined benefit plan rose from $215,000 to $220,000. Limits on annual compensation taken into account also rose, but the compensation used in the definition of a key employee was unchanged.

A chart showing details, and limits from 1996 to 2018, can be found at this link.

Fourth Edition of the Governmental Plans Answer Book Published
(Posted on October 2, 2017 by )

The Fourth Edition of the Governmental Plans Answer Book has now been published. It reflects substantial new developments in the area since the Third Edition.

New materials include the following:

  • Department of Labor regulations that define who is a fiduciary as a result of rendering investment advice to a plan or to its participants and beneficiaries
  • Elimination of the ability to obtain IRS determination letters on individually designed plans, except on their inception or termination.
  • Recent legislative developments affecting governmental plans.
  • New and updated information regarding public pension financial reporting and communications practices.
  • Expanded and updated descriptions of hybrid retirement plans provided for employees of state and local government.
  • A review of a Supreme Court case that held a Chapter 7 trustee could not contest the validity of a claimed exemption after the objection deadline expired.
  • Expanded discussion of pre-approved plans.
  • Issuance of IRS opinion and advisory letters on pre-approved 403(b) plans.

For more information on this book, written by Carol V. Calhoun, Cynthia L. Moore, and Keith Brainard, you can use the following links:

Description | Table of Contents | Purchase

Understanding Pre-Approval of 403(b) Plans
(Posted on September 19, 2017 by )

Internal Revenue ServiceIn March 2017, the Internal Revenue Service (IRS) began issuing advisory and opinion letters to the first preapproved retirement programs described in Internal Revenue Code (I.R.C.) § 403(b) (403(b) plans). A new article discusses preapproved 403(b) plans, including their advantages, legal pitfalls, and other issues that an eligible employer may consider when determining whether to convert its existing 403(b) plan into a preapproved plan.

The major topics are:

Read more.

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