|Jan. 23, 2020 | www.fisherphillips.com|
The Internal Revenue Service recently amended its Employee Plans Compliance Resolution System (EPCRS) to allow more retirement plan qualification failures to be self-corrected, including retroactive plan amendments. This is welcome news for employers. The changes to EPCRS in Revenue Proc. 2019-19 are intended to facilitate plan compliance while reducing associated costs by allowing plan sponsors more opportunities to self-correct. The changes took effect on April 19, 2019, and supersede Revenue Procedure 2018-52.
The Tax Cuts and Jobs Act (TCJA), passed at the end of 2017, effectively repealed the individual mandate under the Affordable Care Act (ACA) by reducing the tax penalty to zero. Thus, while the ACA still requires individuals to obtain health insurance, there is no tax penalty for ignoring the law. Importantly, however, the penalty was not eliminated until 2019, so individuals could still be assessed taxes under the ACA for failing to maintain coverage through 2018.