The IRS will not issue an Opinion Letter with respect to amendments made between applicable On-Cycle Submission Periods, and a Mass Submitter should not submit an application for an Opinion Letter with respect to plan amendments. 2021-3 is amplified. Pursuant to section 11.03 of Rev. For further information regarding this revenue procedure, contact Employee Plans at (513) 975-6319 (not a toll-free number). 2013-22 noted that the IRS was not establishing a determination letter program for 403(b) plans at that time, so that an employer adopting a 403(b) Pre-approved Plan would not be able to apply for an individual determination letter for the plan. An Eligible Employer may adopt a 403(b) Pre-approved Plan (including an Interim 403(b) Pre-approved Plan or an Existing 403(b) Pre-approved Plan) at any time during a Cycle. Comments may be submitted in one of two ways: (1) Electronically via the Federal eRulemaking Portal at www.regulations.gov (type IRS-2021-0011 in the search field on the regulations.gov homepage to find this revenue procedure and submit comments). Proc. In addition, if an employer adds language to a 403(b) Pre-approved Plan to satisfy the requirements of 415 due to the required aggregation of plans, the employer may obtain reliance with regard to 415 by applying for a determination letter on Form 5307 (as updated). .24 Rev. 2021-37. Any plan submitted by a Mass Submitter must include language designating the Mass Submitter as agent for the Provider for purposes of making plan amendments. They may not be relied upon as authoritative interpretations. Suspended is used in rare situations to show that the previous published rulings will not be applied pending some future action such as the issuance of new or amended regulations, the outcome of cases in litigation, or the outcome of a Service study. For further information regarding this notice contact James Liechty at (202) 317-7005 (not a toll-free number). A Mass Submitter must bracket and identify the optional provisions when submitting the plan to the IRS, and also must provide the IRS a written representation describing the choices available to Providers and the coordination of optional provisions. WASHINGTON The Internal Revenue Service today issued guidance for business 2020-40, sets forth rules for a regular six-year remedial amendment cycle for 401(a) pre-approved plans and an extension of the remedial amendment period and adoption deadline for plan amendments for 401(a) pre-approved plans. (b) Optional provisions A Flexible Plan may include optional provisions that comply with the requirements set forth in this paragraph. 2016-37 is revised to read as follows: Special deadlines for governmental employers. However, if you deliver goods outside the continental U.S., this rate increases to $71per day. 2020-21, 2020-22 I.R.B. 9340, 72 FR 41128). DISCDomestic International Sales Corporation. 2021-30 regarding the ability of the Adopting Employer to rely on the Opinion Letter). While self-employed persons cannot use the high-low method, they may use other per diem rates to compute the amount of their business expense deduction for business meals and incidental expenses (but not lodging), or for incidental expenses alone. .08 Section 21.05 of Rev. 2021-37. 2016-37 in future guidance to reflect guidance issued after the publication of Rev. New Zealand per diem rates provide for a maximum of $165 excluding GST for accommodation. (1) A Provider is any person (including, if applicable, a Mass Submitter) that: (a) has an established place of business in the United States where it is accessible during every business day, and (b) represents to the IRS in its application for an Opinion Letter that it reasonably expects at least 15 Eligible Employers to adopt one of the 403(b) Pre-approved Plans of the Provider. All information on the application form (or Appendix A) must be typed. In addition, an Opinion Letter will not be issued under this revenue procedure for prototype plans intended to meet the requirements for individual retirement arrangements under 408. Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions. For example, if a change in 403(b) Requirements occurs in the 1st year of Cycle 3, and is placed on the Required Amendments List in the 2nd year of Cycle 3, then the Remedial Amendment Period for a Form Defect related to that change would expire at the end of the 4th year of Cycle 3. For this purpose, an Opinion Letter will be given the same effect as a determination letter. The US military pays its members per diem in accordance with the Joint Travel Regulations. The estimated number of respondents and/or recordkeepers is 8,188. EXPIRATION OF REMEDIAL AMENDMENT PERIOD, SECTION 23. .20 Notice 2020-35, in relevant part, modifies Rev. (a) In general A Flexible Plan is a plan submitted by a Mass Submitter that includes optional provisions, as described in the immediately subsequent paragraph (b) of this section 11.03. This revenue procedure applies to disqualifying provisions that are effective with respect to a plan after December 31, 2020. .03 Inclusion of Investment Arrangements in the 403(b) Pre-approved Plan A 403(b) Pre-approved Plan includes the Investment Arrangements under the plan in addition to the single plan document or the basic plan document and adoption agreement. Proc. If, after the 30-day period, neither action has been taken, the IRS may treat the application as having been withdrawn. The rate for any locality of travel within or outside the U.S. for the incidental expenses only deduction is $5 per day. .04 Provision regarding conflicting provisions in Investment Arrangement or other documents Each 403(b) Pre-approved Plan must provide that, in the event of any conflict between the terms of the single plan document or the basic plan document and adoption agreement, as applicable, and the terms of Investment Arrangements under the plan (or of any other documents incorporated by reference into the plan), the terms of the single plan document or the basic plan document and adoption agreement, as applicable, shall govern. As provided in section 11.01 of Rev. 2017-18, as modified by Notice 2020-35, expired on June 30, 2020. SC Comptroller General 1200 Senate Street 305 Wade Hampton Office Building Columbia, SC 29201. Each 403(b) Pre-approved Plan that is a Governmental Plan must define an employee as any employee of the Adopting Employer maintaining the plan or any other Eligible Employer aggregated with that Adopting Employer in a manner consistent with Notice 89-23. .01 Notification and effect A Provider may withdraw its application for an Opinion Letter at any time prior to the issuance of the letter by notifying the IRS in writing of the withdrawal at the address provided in section 20. The special M&IE rates for taxpayers in the transportation industry are $69 for any locality of travel in the continental United States (CONUS) and $74 for any locality of travel outside the continental United States (OCONUS). Proc. .04 Effect of employer amendments on a plans eligibility for the Cycle system Except as provided in section 9.05, employer amendments made to the 403(b) Pre-approved Plan will not affect the plans eligibility for the Cycle system. The application must be typed. WASHINGTON The U.S. General Services Administration (GSA) today released the fiscal year (FY) 2021 travel per diem rates, which will take effect on October 1, 2020. 2020-10, 2020-2 I.R.B. FY 2021 Per Diem Rates apply from October 2020 - September 2021 . Proc. A Provider may apply for Opinion Letters for any number of 403(b) Pre-approved Plans. (d) 403(b) Requirements (either statutory or regulatory) that become effective for the plan in a calendar year following the calendar year in which the On-Cycle Submission Period begins, regardless of when the 403(b) Requirements are enacted or issued (for example, 403(b) Requirements first effective in 2023, for applications submitted during the On-Cycle Submission Period beginning in 2022). Under 147(f)(2)(B), an issue will be treated as having been approved by any governmental unit if the issue is approved by the applicable elective representative of the governmental unit after a public hearing following reasonable public notice, or by voter referendum of the governmental unit. See section 25. Proc. 2013-22 provides that the IRS will announce, in subsequent guidance, the expiration date of the Initial Remedial Amendment Period for all Eligible Employers. Per diem payments are not part of an employees standard wage, so technically, theyre not taxable. However, under certain conditions, it can be considered taxable income. Youll still need to include a per diem for business travel on an income tax return. For the most part, these arent included in the employees tax amount owed. Revocation of an Opinion Letter may be applied retroactively. 467, Rev. See section 8. If substantiation is required, any unsubstantiated portion of the allowance must be returned or treated as taxable wages. Proc. The per diem rates in lieu of the rates described in Notice 2020-71 (the meal and incidental expenses only substantiation method) are $74 for travel to any high-cost locality and $64 for travel to any other locality within CONUS. (a) New plan In the case of a new plan, on the later of (i) the last day of the second calendar year following the calendar year in which the plan is put into effect, or (ii) in the case of a Governmental Plan, 90 days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins after the end of the plans initial plan year. .02 Section 403(b) plan that is a Governmental Plan For a Governmental Plan, a Provider (or the Adopting Employer, if applicable) is considered to have adopted an interim amendment described in section 9.02 timely if the plan amendment is adopted by the later of (1) the end of the second calendar year following the calendar year in which the change in 403(b) Requirements is effective with respect to the plan, or (2) ninety days after the close of the third regular legislative session of the legislative body with the authority to amend the plan that begins on or after the date the plan amendment becomes effective. The IRSs review will not consider, and an Opinion Letter will not express an opinion with respect to, the terms of any Investment Arrangements under the plan of any Adopting Employer or any other documents that may be incorporated by reference into an Adopting Employers plan. .02 Rev. .04 Section 15.06(1)(a) of Rev. Self-employment tax rate is 15.3% of net SE earnings, broken down asfollows: Social Security portion: Net SE earnings (up to limit) 12.4% Medicare portion: Net SE earnings 2.9% Additional Medicare tax of 0.9% on earned income over $200,000(Single, HOH, QW), $250,000 (MFJ), or $125,000 (MFS). Foreign Per Diem Rates by Location DSSR 925. Proc. .07 Separate applications required for Single Document Plans A separate plan and application is required for a Single Document Plan. 2019-39 also provides that, prior to the end of Cycle 2, the IRS will issue guidance providing rules for determining when the limited extension of the Initial Remedial Amendment Period expires with respect to a 403(b) Pre-approved Plan Form Defect first occurring during Cycle 1. .05 Plan must satisfy 403(b) Requirements independent of Investment Arrangements The IRSs review of a 403(b) Pre-approved Plan will consider only the terms of the single plan document or the basic plan document and adoption agreement, as applicable. The next Cycle begins on the following day. c. The following locality has been removed from the list of high-cost localities: Gulf Breeze, Florida. (1) a provision that causes a plan to fail to satisfy the 403(b) Requirements; (2) the absence of a provision that causes a plan to fail to satisfy the 403(b) Requirements; (3) a provision of a plan that is integral to a 403(b) Requirement that has been changed (either by statute, or in regulations or other guidance published in the Internal Revenue Bulletin); or. Applications for a plan that is word-for-word identical to a Mass Submitters 403(b) Pre-approved Plan for a Cycle may be submitted until the IRS informs the Mass Submitter that word-for-word identical applications will no longer be accepted, which is expected to be shortly before the issuance of Opinion Letters for the next Cycle. 2019-39, the limited extension of the Initial Remedial Amendment Period, as defined under Rev. (2) Section 403(b) Pre-approved Plans that are intended to be Retirement Income Accounts and plans that are not Retirement Income Accounts may not be set forth in the same basic plan document. The incidentals portion is calculated as the cost of meals plus 10% of the combined lodging and Previously, the IRS issued Notice 2021-25PDF providing guidance under the Taxpayer Certainty and Disaster Relief Act of 2020, which added a temporary exception to the 50% limit on the amount that businesses may deduct for food or beverages. corporations, For The preceding sentence applies to an Eligible Employer that adopts a 403(b) Pre-approved Plan that amends or restates a plan maintained by the Eligible Employer, as long as the form of the plan that is being amended or restated satisfies the 403(b) Requirements at the time of the adoption of the 403(b) Pre-approved Plan. In this case, the Adopting Employer will lose reliance on the Opinion Letter as of the date participation in the 403(b) Pre-approved Plan ends but the plan will remain eligible for the Cycle system (provided that the Adopting Employer adopts timely interim amendments) until the end of the Cycle that includes the date on which participation in the 403(b) Pre-approved Plan ends. The high-low M&IE rates increase to $74 (from $71) for travel to high-cost locations and to $64 (from $60) for travel to other locations. 7 For purposes of this revenue procedure, references to Rev. For example, a Flexible Plan could include as an optional provision a provision permitting participant loans, provided that the provision satisfies the 403(b) Requirements and the plan is drafted so that the exclusion of the provision does not cause the plan to fail to satisfy the 403(b) Requirements. Administrative provisions are those provisions that describe the administration of the plan, including the powers, duties, and responsibilities of a plans custodian, administrator, Adopting Employer, and other fiduciaries. Proc. (3) Standardized and Nonstandardized Plans may not be set forth in a single adoption agreement. Audit & The principal author of this revenue procedure is Nathanael DeJonge of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes). Proc. Provided an interim amendment (as described in section 9.02 of this revenue procedure) is made timely, except as otherwise provided by statute, regulations, or other guidance published in the Internal Revenue Bulletin, the Remedial Amendment Period for a Form Defect first occurring after the Initial Remedial Amendment Period, expires at the later of (1) the end of the Cycle that includes the date on which the Remedial Amendment Period would have ended if the plan were an individually designed plan, or (2) the end of the first Cycle in which an application for an Opinion Letter that considers the Form Defect may be submitted. Proc. .03 Employer amendments that will not affect reliance As provided in section 8, an Adopting Employer may continue to rely on an Opinion Letter for a 403(b) Pre-approved Plan if it makes amendments to the plan that are described in paragraphs (1) through (8) of this section 9.03. .03 Rev. For example, the adoption agreement, if applicable, should be amended to require that an Adopting Employer identify whether it is a non-QCCO (in which case, its employees participating in the plan would be subject to the nondiscrimination requirements of 403(b)(12)). 5 For purposes of this revenue procedure, references to Rev. Box 7604, Ben Franklin Station, Washington, D.C. 20044. Revenue rulings and revenue procedures (hereinafter referred to as rulings) that have an effect on previous rulings use the following defined terms to describe the effect: Amplified describes a situation where no change is being made in a prior published position, but the prior position is being extended to apply to a variation of the fact situation set forth therein. This notice provides the 2021-2022 special per diem rates for taxpayers to use in substantiating the amount of ordinary and necessary business expenses incurred while traveling away from home. Proc. See sections 8.01 and 8.02 for the effect of any other amendments on reliance on an Opinion Letter by the Adopting Employer. Proc. See section 22. In the case of an Adoption Agreement Plan, the adoption agreement must state that it is to be used with only one basic plan document and must identify that document. (3) Nonstandardized Plans may permit an Adopting Employer to select an allocation formula for contributions other than elective deferrals that satisfies one of the design-based safe harbors in 1.401(a)(4)-2(b)(2), and to select a safe harbor compensation definition for the formula that satisfies 1.414(s)-1(c). This revenue procedure also sets forth the rules for determining when Remedial Amendment Periods expire for 403(b) Pre-approved Plans. For example, a change that limits the number of participant loans or a change that adds a new choice of plan entry date would be considered a Minor Modification. 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