Harvey Aftermath: Benefit Plan Assistance (article)
Several government agencies including the Internal Revenue Service (IRS) and Department of Labor (DOL) are providing assistance and guidance to assist individuals and businesses affected by Hurricane Harvey. Following are highlights of guidance issued thus far.
- Retirement plans. Certain restrictions on plan loans and hardship distributions from retirement plans are eased for participants impacted by the hurricane, according to IRS Announcement 2017-11.
- Plan sponsors of group health plans are encouraged to provide reasonable accommodations to prevent loss of benefits by plan participants and beneficiaries who may be unable to meet certain deadlines for filing benefit claims or COBRA elections. See the DOL Compliance Guidance and FAQs for Participants and Beneficiaries for additional information.
- Leave-based donation programs. In Notice 2017-48, the IRS provides for certain tax relief for leave-based donation programs set up by employers to aid Hurricane Harvey victims. Under these programs, employees can elect to forgo vacation, sick, or personal leave in exchange for cash payments that the employer makes to charitable organizations. For income and employment tax purposes, leave donations would not be considered wages and thus, are tax free, as long as the employer provides these amounts to charitable organizations (as defined in Code Section 170(c)) before January 1, 2019.
- Tax Filings. Relief is available for certain tax filings and payments (see IRS’ Tax Relief for Victims of Hurricane Harvey in Texas). Specifically, an extension is available for filing the Form 5500 series. This relief is not extended, however, for the Form W-2 nor the Forms 1094 and 1095.
Additional information relating to tax relief can be found on the IRS’s dedicated webpage, Hurricane Harvey Information Center.
Looking ahead as other hurricanes are currently brewing, employers and plan sponsors are encouraged to monitor the IRS and DOL websites should the need for disaster assistance and guidance arise.
The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.