2023 RECAP Employee Benefits and Tax
2023 Recap
High Earners Can Still “Catch Up” For Now In welcome news to employers, recordkeepers, and payroll providers, the IRS announced in August that it is giving more time to comply with mandatory Roth catch-up contributions under the SECURE Act 2.0. Employees who are at least 50 years old are currently able to make pre-tax “catch-up contributions” to their employer-sponsored retirement plans, including 401(k) plans – but that’s slated to change for some participants. Certain higher earners will soon be required to make such contributions to an after-tax Roth account. This provision was to take effect on January 1, 2024, but the IRS announced a two-year transition period to give employers a pass until the beginning of 2026. Here’s what you need to know about the pending change’s impact on your organization’s retirement savings plan. Employees Feel the Pinch as Student Loan Payments Resume Federal student loan payments resumed in October after being on pause since 2020 when the COVID-19 pandemic began. Since SCOTUS struck down the Biden Administration’s $10,000 student loan forgiveness program in June — saying that the U.S. Education Secretary didn’t have the authority to forgive this debt — it may be time for employers to start talking about how to alleviate some of this financial pressure on employees (if you haven’t already). Some Pandemic-Related Benefits Remain While the COVID-19 public health emergency officially ended earlier this year, you should note that some benefits stemming from the pandemic are ongoing. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was originally signed into law in March 2020. Soon after, the Consolidated Appropriations Act, 2021 (CAA 2021) was signed into law that December and remains in effect to this day, continuing many of the financial programs and incentives in the CARES Act, including the tax-free benefit for employer-provided student loan payments.
Sheldon Blumling Partner Irvine sblumling@fisherphillips.com
Made with FlippingBook - professional solution for displaying marketing and sales documents online