IRA

Tax-Related Deadline Relief for California Wildfire Victims

The IRS has issued News Release CA-2018-11 announcing tax-related deadline relief for certain California residents who are victims of recent wildfires. In addition to postponement of tax return deadlines falling within dates identified in the news release, the relief includes postponement of deadlines for completing certain time-sensitive tax-related acts specified in Treasury Regulation 301.7508A-1(c)(1).

These acts include completion of rollovers or recharacterizations, correction of certain excess contributions, making plan loan payments, filing Form 5500, and certain other acts under this regulation. For those who qualify, such deadlines falling on or after July 23, 2018, and on or before November 30, 2018, are postponed to November 30, 2018.

The area identified as directly qualifying for relief is currently limited to Shasta County. The relief applies specifically to residents of the identified area, to those whose businesses or records necessary to meet a covered deadline are located there, and to certain relief workers providing assistance following the disaster events. Any individual visiting a covered disaster area who is injured or killed as a result of the disaster events is also entitled to deadline relief.

Affected taxpayers who reside or have a business located outside the covered disaster area are required to call the IRS disaster hotline at 1-866-562-5227 to request relief to which they feel they may be entitled.

 


Ascensus Joins the Symitar Vendor Integration Program (VIP)

VIP Will Enable Ascensus to Integrate with Episys to Help Clients Save Time and Reduce Risk

Dresher, PA—Ascensus, a technology-enabled solutions provider that helps more than 8 million Americans save for the future, today announced that it has joined the Symitar® Vendor Integration Program (VIP). Participation in the program will provide Ascensus with access to Symitar’s technical resources to enable IRAdirect express™ to integrate with Episys®—the leading data processing system in the United States in all asset ranges over $50M. The VIP is designed to help ensure that Symitar’s customers can easily deploy third-party products.

After the integration with Episys via SymXchange™, IRAdirect express will give Ascensus’ clients the ability to enter IRA transactions to their core processing system and IRAdirect in one easy step. They can post to both systems in real time, making IRA transactions easier and more efficient while helping to avoid common input errors.

IRAdirect express integrates with Episys via SymXchange™, a services-based programming interface that enables third-party vendors and credit unions to access the platform’s core data and business rules. The integrity of data is maintained throughout any data exchange, because access to business rules and data is managed through a service layer which governs these interactions.

“Ascensus is excited to join the Symitar VIP, as integrating will allow users to experience increased IRA processing accuracy while reducing their risk of non-compliance,” says Steve Christenson, Ascensus’ executive vice president of retirement and health services. “As a result, our clients will be able to spend less time on back-office administration and more time growing their businesses.”

The service is expected to be available on August 13, 2018.

Symitar’s VIP takes the customer out of the middle, providing vendors with direct access to Symitar’s technical resources and test systems. VIP inclusion is not an endorsement of the vendor’s product.

About Ascensus
Ascensus helps more than 8 million Americans save for the future—retirement, education, and healthcare—through technology-enabled solutions. With more than 35 years of experience, the firm offers tailored solutions that meet the needs of asset managers, banks, credit unions, state governments, financial professionals, employers, and individuals. Ascensus supports over 60,000 retirement plans, more than 4 million 529 education savings accounts, and a growing number of ABLE savings accounts. It also administers more than 1.6 million IRAs and health savings accounts. As of March 31, 2018, Ascensus had over $187 billion in total assets under administration. For more information about Ascensus, visit ascensus.com.

View career opportunities at http://careers.ascensus.com/page/show/tpa and careers.ascensus.com or on LinkedIn at linkedin.com/company/ascensus. For the latest company news, follow @AscensusInc on Twitter.

About Symitar
Symitar®, a division of Jack Henry & Associates, Inc. (NASDAQ:JKHY), is a provider of integrated computer systems for credit unions of all sizes. Symitar has been selected as the primary technology partner by more than 800 credit unions, serving as a single source for integrated, enterprise-wide automation and as a single point of contact and support. Additional information about Symitar is available at www.symitar.com.

About Jack Henry & Associates, Inc.
Jack Henry & Associates, Inc.® (NASDAQ: JKHY) is a leading provider of technology solutions and payment processing services primarily for the financial services industry. Its solutions serve almost 10,600 customers nationwide, and are marketed and supported through three primary brands. Jack Henry Banking® supports banks ranging from community banks to multi-billion dollar institutions with information processing solutions. Symitar® is a leading provider of information processing solutions for credit unions of all sizes. ProfitStars® provides highly specialized products and services that enable financial institutions of every asset size and charter, and diverse corporate entities to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. Additional information is available at www.jackhenry.com.


Final Regulations Published on Automatic Extension of Time to File Certain Information Returns

Published in the August 3, 2018, Federal Register are final regulations providing rules on the automatic and non-automatic extensions of time to file certain information returns. Initially proposed in August 2015, the regulations sought to remove the automatic 30-day extension—obtained by filing Form 8809, Application for Extension of Time to File Information Returns—of time to file the Form W-2 series (excluding Form W-2G, Certain Gambling Winnings), replacing it with an additional, non-automatic 30-day extension. This non-automatic extension would require filers to submit requests for the extension to the IRS, subject to approval (whereas filing Form 8809 results in an automatic extension). The final regulations expand the list of forms subject to the updated non-automatic extensions to include forms reporting nonemployee compensation (i.e., Form 1099-MISC, Miscellaneous Income).

Forms Retaining Automatic Extension

Forms retaining the automatic extension include Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, forms that report employee compensation in the Form 1099 series (including Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.), and forms in the Form 5498 series (including Form 5498, IRA Contribution Information). The final regulations are effective as of August 3.

Following is the complete list of forms mentioned in the final regulations and whether they are allowed the automatic extension.

Automatic 30-day extension retained

Form W-2G

Form 1042-S

Form 1094-C

Form 1095-B

Form 1095-C

Form 3921

Form 3922

Form 8027

Form 1097 series

Form 1098 series

Form 1099 series (for forms reporting employee compensation)

Form 5498 series

 

Non-automatic extension

1099-MISC (reporting of nonemployee compensation)

Form W-2 series (excluding Form W-2G)


IRS Releases 2018 Form 1099-R for Reporting Retirement Plan Distributions

The IRS has released the finalized version of the 2018 tax year Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. The form reports distribution amounts from retirement savings arrangements and certain other investments, as well as the associated reasons or circumstances for distributions (e.g., early, normal or death distributions).

One notable change is the addition of Code M for certain retirement plan loan amounts that are offset and treated as distributed. Under the Tax Cuts and Jobs Act of 2017, a retirement plan loan that is offset due to plan termination or the plan participant’s separation from employment has an extended time period during which it may be made up and rolled over to an IRA or another employer-sponsored retirement plan. That extended deadline is the individual’s tax return filing deadline for the year of offset, including any tax filing extension.

Earlier this month, the Instructions for Forms 1099-R and 5498 were released. The IRS also released an updated version of the 2018 General Instructions for Certain Information Returns.


Second Round of Tax Reform Could Include Retirement Savings Provisions

A “House GOP Listening Session Framework” document, released by the Ways and Means Committee, hints at retirement savings provisions to be included in another round of tax reform legislation, referred to as “Tax Reform 2.0.” The document contains only broad, general descriptions, but many expect significantly more retirement savings provisions to be in the full legislative package when released.

Included in the document is a provision to create a “universal savings account,” a new tax-favored savings account that could be used for general purposes. Another provision would create a “new baby” early distribution exception. Amounts withdrawn from retirement savings arrangements when a new child is born to or adopted by parents with such accounts would not be subject to the 10 percent early distribution penalty tax. In addition, withdrawn amounts could be repaid under the legislation’s terms.

More details on this second round of tax cut legislation are expected to be released soon. Many feel, however, that passage in the Senate is less likely than in the House.


Dennis Zuehlke Discusses New Tax Reform

In a recent artic​le​ published by the Credit Union National Association, Dennis Zuehlke discusses the recently passed tax-reform bill​ eliminating the ability to reverse a Roth individual retirement account (IRA) conversion​, also known as a recharacterization. He warns that individuals who convert and do not seek tax advice may not be aware of the tax impact until they file their federal tax return months later.


IRS Releases 2018 Detailed Instructions for IRA Reporting

The IRS has released the 2018 tax year Instructions for Forms 1099-R and 5498. This release was much anticipated because of tax law changes resulting from the Tax Cuts and Jobs Act in December 2017 and the Bipartisan Budget Act in February 2018. The release of these detailed instructions was delayed substantially from prior years.

The following changes are included in the 2018 Instructions.

  • No recharacterizing of 2018 or later Roth IRA conversions, or 2018 or later retirement plan-to-Roth IRA rollovers
  • Special rules for victims of 2016 and 2017 natural disasters
  • New Form 1099-R reporting code for a qualified plan loan offset distribution due to severance from employment or termination of a plan
  • New Form 5498 reporting code for rollover of offset retirement plan loans
  • Special reporting for U.S. Armed Forces in designated combat zones

Although the IRS previously released the 2018 version of Form 5498, IRA Contribution Information, as of this writing, the IRS had not released the 2018 version of Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.


IRS Grants Tax-Related Deadline Relief to Texas Storm Victims

The IRS has issued News Release TX-2018-05, describing tax-related deadline relief available to victims of severe storms and flooding in Texas. In addition to postponement of tax return deadlines falling within dates identified in the news release, the relief includes postponement of deadlines for completing certain time-sensitive tax-related acts specified in Treasury Regulation 301.7508A-1(c)(1). These acts include completion of rollovers or recharacterizations, correction of certain excess contributions, making plan loan payments, filing Form 5500, and certain other acts under this regulation.

Such deadlines falling on or after June 19, 2018, and on or before October 31, 2018, are postponed to October 31, 2018.

The Texas counties included in the relief at this time include Cameron and Hidalgo. The relief applies specifically to residents of these identified areas, to those whose businesses or records necessary to meet a covered deadline are located there, and to certain relief workers providing assistance following the disaster events. Any individual visiting a covered disaster area who is injured or killed as a result of the events is also entitled to deadline relief. Affected taxpayers who reside or have a business located outside the covered disaster area are required to call the IRS disaster hotline at 866-562-5227 to request relief.


IRS Releases 2018 Form 5498 for IRA Contribution Reporting and Updates General Instructions

The IRS has released the finalized version of the 2018 tax year Form 5498, IRA Contribution Information. The separate instructions for the 2018 form—Instructions for Forms 1099-R and 5498—had not yet been released at the time of this writing. The IRS also released an updated version of the 2018 General Instructions for Certain Information Returns.

Form 5498

Form 5498 is used by IRA custodians, trustees and issuers to report IRA contributions, rollovers, conversions, recharacterizations, fair market value, and other IRA contribution-related information. In addition to date and deadline changes, this 2018 version was updated with changes to Box 13a, now titled “Postponed/late contrib.” The form instructions indicate the following changes for Box 13c, Code. Both revisions were a result of changes made by the Tax Cuts and Jobs Act of 2017.

  • Code FD, PL115-97 for the Sinai Peninsula of Egypt, has been added as a code for late contributions made by individuals who serve in this qualified hazardous duty area.
  • Code PO is a new code to use for retirement plan participants who make rollovers of qualified retirement plan loan offsets.

General Instructions for Certain Information Returns

The 2018 General Instructions for Certain Information Returns was first released in late January, but was updated further and rereleased on July 5. The General Instructions are update every year for dates, limitations, and IRS penalties for incorrect reporting. Also see the “What’s New” section for additional revisions.

As of this writing, the IRS had not released the 2018 versions of Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., or the detailed instructions for the Forms 1099-R and 5498.

 


Taxpayer Group Files Lawsuit to Block CalSavers Retirement Program

A lawsuit was filed last week (May 31, 2018) in an attempt to block implementation of a new retirement savings program established by the State of California. The California Secure Choice Retirement Savings Program—recently rename CalSavers—is an IRA-based retirement savings program for that state’s private sector employees whose employers do not offer a workplace retirement plan, which was authorized by legislation enacted in 2016. According to CalSavers, some 7.5 million Californians work for employers that do not offer a retirement plan.

The lawsuit was filed by the Howard Jarvis Taxpayers Association (HJTA) and seeks to prevent introduction of this program projected to launch sometime in 2018. In addition to the program itself, also named as defendant is John Chiang, California State Treasurer and Chair of the California Secure Choice Retirement Savings Board.

HJTA claims to have standing to sue based on the fact that some of its members—claimed in the filing to number more than 200,000—could be affected either as employers required to participate in the payroll withholding program, or employees who might be automatically enrolled. The lawsuit was filed in U.S. District Court for the Eastern District of California.