Articles — Ascensus

Coverdell ESAs Come with Different Roles

What are the different roles commonly seen on a Coverdell ESA application? When can the designated beneficiary of an ESA be changed? When can the responsible individual of an ESA be changed?

DOL Releases Additional Investment Advice Guidance

The DOL has issued two pieces of guidance on its new fiduciary advice prohibited transaction exemption. The first piece contains a detailed set of FAQs for investment professionals and financial organizations. The second piece is written for retirement investors. Here are the main takeaways from this latest round of guidance.

DOL Withdraws Independent Contractor Rule

The DOL has withdrawn the independent contractor rule that was scheduled to take effect on May 7, 2021.

Employer PlanAscensusMay 20, 2021Compliance & Operations, Retirement Plan, DOL, Eligibility

What to Know about the Summary Plan Description

What is a summary plan description? When must it be given and to whom? Can it be delivered electronically? What are the consequences of not providing one?

RMD Relief and Coronavirus-Related Distributions Are Not Extended to 2021

You and your staff may be fielding questions from clients about whether coronavirus-related distributions are still available in 2021 or whether there’s an RMD waiver for 2021. Those two CARES Act provisions have ended, but some parts of the relief are still applicable.

IRS Extends IRA, HSA, ESA Contribution Deadline and Form 5498 Filing Deadline

The IRS officially extended the deadline for individuals to file their federal tax returns and make IRA, HSA, and ESA contributions with Notice 2021-21. This notice also gives financial organizations until June 30, 2021, to file and furnish Form 5498 series forms.

IRA, HSA, ESAAscensusApril 15, 2021Compliance & Operations, IRA, HSA, Coverdell ESA, IRS, Guidance & Legislation, Contribution, Form 5498, Reporting, Tax

Accessing IRA Assets Early: Know the Options, Consider the Ramifications

Many IRA owners who have been negatively impacted financially by the COVID pandemic may look to access their IRA assets early. While doing so may result in a penalty tax, the IRS does provide some exceptions. But IRA owners should also consider the true cost of dipping into their retirement savings early.

IRAAscensusApril 15, 2021Compliance & Operations, IRA, Traditional IRA, Roth IRA, Distribution

Accessing 401(k) Assets Early: Know the Options—and the Potential Hurdles

Federal rules restrict withdrawals from 401(k) plans even more than they do for IRAs. Even so, it may be worth discussing how to gain early access to plan assets, especially with clients who may be dealing with financial repercussions of the COVID pandemic.

New IRA Documents May Be Just Around the Corner

The IRS has indicated that it plans to release new IRA model documents for each type of IRA. When that happens, all IRA trustees, custodians, and issuers will be required to use either the new model documents or the new listing of required modifications if using a prototype document.

Recouping HSA Contributions

An employer generally cannot recoup contributions it made to an employee’s HSA. But there are certain circumstances in which the IRS does allow an employer to recoup, or recover, contributions.

HSA, expertAscensusApril 15, 2021Compliance & Operations, HSA, Contribution, Q&A

DOL Releases Additional Prohibited Transaction Exemption Guidance

The DOL issued two pieces of guidance on its new fiduciary advice prohibited transaction exemption, PTE 2020-02. One is intended to educate retirement savers about considerations when choosing a potential advisor, and the other is a detailed set of frequently asked questions.

Using Safe Harbor Contributions to Pass ADP Testing

Making a retirement plan a safe harbor plan is another way for a plan to pass its ADP testing. What did the SECURE Act change to allow for this option? Are there requirements or restrictions to be aware of?

Employer Plan, expertAscensusApril 15, 2021Compliance & Operations, Retirement Plan, Contribution, Distribution, Q&A

When Is It OK to Accept Last-Minute Contributions?

Find out when it’s okay and when it’s not okay to accept prior-year contributions that are mailed to your organization or deposited through an ACH payment after the contribution deadline.

ESA, HSA, IRAAscensusMarch 18, 2021Compliance & Operations, IRA, HSA, Coverdell ESA, SIMPLE IRA Plan, SEP Plan, Contribution, Reporting

Reporting Contributions on Forms 5498 and 5498-SA

If your financial organization administers IRAs or HSAs, it’s responsible for reporting the contributions made to these accounts to account owners and to the IRS annually by May 31. Find out how to complete this type of reporting on Forms 5498 and 5498-SA.

Accepting and Reporting Coverdell ESA Contributions

Is your organization responsible for ensuring that family members do not contribute more than the annual contribution limit to a Coverdell ESA? Can you accept ESA contributions on the child’s 18th birthday? How are ESA contributions reported and what is the reporting deadline?

ESA, expertAscensusMarch 18, 2021Compliance & Operations, Coverdell ESA, Contribution, Reporting, Q&A

IRS Provides Updated Draft Withholding Forms

The IRS has indicated that Form W-4P will be split into two forms: one for periodic pension or annuity payments and the other—a new form—for nonperiodic payments. Early release of the 2022 draft versions of these forms are now available.

Georgetown CRI Study Explores Retirement Plan Coverage Gap

Roughly one-third or more of private sector workers do not have access to a retirement plan at their place of employment. How the country might address this “coverage gap” is the subject of a study that examines the potential for reducing the coverage gap through several retirement plan design approaches.

IRS Issues Deadline Relief for Victims of Recent Winter Storms

The IRS issued news releases announcing the postponement of certain tax-related deadlines for both Texas and Louisiana victims of severe winter storms. The tax relief postpones various tax filing and payment deadlines that occurred starting on February 11.