Compliance Newsletter March 2024
- IRS Postpones Form 5558 Electronic Filing Through EFAST2
The IRS has postponed electronic filing of Form 5558 through EFAST2 until Jan. 1, 2025. - Puerto Rico 2024 Limits
2024 limits have been announced for retirement plans solely or dually qualified in Puerto Rico. - Disaster Relief for California, Maine, Michigan, Washington & West Virginia
The IRS and PBGC have issued disaster relief in response to various natural disasters.
IRS Postpones Form 5558 Electronic Filing Through EFAST2
The Internal Revenue Service (IRS) has postponed electronic filing of Form 5558 through the ERISA Filing Acceptance System (EFAST2) until January 1, 2025. Per the IRS, plan sponsors and administrators should continue to use a paper Form 5558.
EFAST2
EFAST2 is used to electronically receive and display Form 5500 series Annual Returns/Reports. Plan sponsors or administrators must generally file the Form 5500 series through the Department of Labor’s EFAST2 web site.
Form 5558
Form 5558 is used to request a one-time extension of time to file a Form 5500 series or Form 8955-SSA. The extension provides for an additional 2½ months after the normal due date. The IRS had previously stated that Form 5558 could be filed electronically via EFAST2 beginning January 1, 2024. However, due to administrative issues involving the EFAST2 system, plan sponsors and administrators should continue to use a paper Form 5558 to request such extension.
Puerto Rico 2024 Limits
The Puerto Rico Department of Treasury announced the 2024 limits for retirement plan sponsors of dually qualified plans and plans qualified solely in Puerto Rico.
New Limits
| Description | 2023 | 2024 |
|---|---|---|
| Compensation | $330,000 | $345,000 |
| Defined Contribution Annual Contribution Limit | $66,000 | $69,000 |
| Defined Benefit Annual Benefit Limit | $265,000 | $275,000 |
| Highly Compensated Employee* | $150,000 | $155,000 |
| Pretax Elective Deferral – Dual Qualified | $20,000 | $20,000 |
| Pretax Elective Deferral – Solely Qualified | $15,000 | $15,000 |
| Catch-up – Dual and Solely Qualified (plan not sponsored by federal government and at least age 50 by plan year end) | $1,500 | $1,500 |
| Catch-up (Only retirement plans sponsored by U.S. federal government and employees over age 50) | $7,500 | $7,500 |
| After-Tax Voluntary – Solely Qualified | 10% of the participant’s maximum recognizable compensation for all years of participation in the retirement plan | |
| Periodic payments that are not subject to 10% withholding in Puerto Rico | Retirees under age 60, the first $31,000. For those age 60 or older as of December 31, the first $35,000. | |
* Employee is highly compensated for 2024 if they received compensation in excess of $150,000 in 2023; or a shareholder owning over 5% of the voting shares or total value of all stock of the employer; or if the employer is not a corporation, owning over 5% of the capital or interest in the profits of the employer.
Disaster Relief for California, Maine, Michigan, Washington, and West Virginia
In response to various natural disasters impacting parts of California, Maine, Michigan, Washington, and West Virginia, the Internal Revenue Service (IRS) and Pension Benefit Guaranty Corporation (PBGC) extended certain deadlines for individuals and businesses impacted by such events.
Impacted Areas and Dates
Individuals who reside or have a business in any of the following areas may be eligible for deadline relief:
- California – certain deadlines occurring between January 21, 2024, and June 17, 2024, are extended to June 17, 2024, in San Diego County.
- Maine – certain deadlines occurring between December 17, 2023, and June 17, 2024, are extended to June 17, 2024, in Androscoggin, Franklin, Hancock, Kennebec, Oxford, Penobscot, Piscataquis, Somerset, Waldo, and Washington counties.
- Michigan – certain deadlines occurring between August 24, 2023, and June 17, 2024, are extended to June 17, 2024, in Eaton, Ingham, Ionia, Kent, Livingston, Macomb, Monroe, Oakland, and Wayne counties.
- Washington – certain deadlines occurring between August 18, 2023, and June 17, 2024, are extended to June 17, 2024, in Spokane County.
- West Virginia – certain deadlines occurring between August 28, 2023, and June 17, 2024, are extended to June 17, 2024, in Boone, Calhoun, Clay, Harrison, Kanawha, and Roane counties.
Impacted Deadlines
Below is a partial list of retirement-impact tax filing and payment deadlines that may be extended:
- Retirement plan loan repayments under Internal Revenue Code section 72(p)(2)
- Required minimum distributions under Internal Revenue Code section 401(a)(9)
- The 10% additional income tax continues to not apply even if the following is missed during the relief period:
- Substantially equal payments made over the participant’s life or joint lives of the participant and designated beneficiary
- Deadline for using a distribution from an IRA for a first-time home purchase by the close of the 120th day after the distribution is received
- Prior tax year contribution deadlines for retirement plans
- Indirect rollover distribution deadlines
- 60-day rollovers
- Rollover of qualified loan offsets
- Refunds as a result of
- Excess deferrals
- ADP/ACP non-discrimination testing
- Eligible automatic contribution arrangement (EACA) withdrawals
- Excess IRA contributions
- Deadline for recontributing qualified reservist distributions
- Form 5500 and Form 8955-SSA filing Form 5948 for IRAs
- PBGC premium payments
- PBGC deadlines that are based on the Form 5500 deadline
- Single Employer Plan Termination Forms 500 and 501
Additional Resources
For any questions related to IRS deadlines and other disaster-related issues, the IRS has a toll-free number at 1-866-562-5227. For PBGC disaster-related questions, call 1-800-736-2444 ext. 4136.
The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment or tax advice. You should consult with appropriate counsel, financial professionals and other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.
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