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Compliance Newsletter October 2023

Form 8955-SSA and 5500-EZ Updates

The IRS issued Revenue Procedure 2023-31, which updates the procedure to request a hardship exemption from filing Forms 8955-SSA and 5500-EZ electronically for plan years starting on or after January 1, 2024.

Background

Form 8955-SSA is used to report information on participants who have terminated with a vested benefit. Form 5500-EZ is the tax filing form that is used mostly by ERISA-exempt plans with only one participant. In 2014, most plans were required to start filing their Form 8955-SSA on the IRS FIRE system and their Form 5500-EZon the DOL’s EFAST2 system. In 2015, the IRS issued guidance that allowed plans to request a hardship waiver in order to file manually on paper. Under the Taxpayer First Act, which was implemented earlier this year, taxpayers who file at least 10 forms a year must file electronically, down from the previous requirement of 250 form filings per calendar year.

Changes

The IRS amended the 2015 exception guidance. In Revenue Procedure 2023-31, the IRS noted that plan sponsors seeking an undue economic hardship waiver of the electronic filing requirements for Forms 8955-SSA and 5500-EZ will be available in the respective form’s instructions or in applicable IRS publications or other guidance, including posting to the IRS.gov website.

Notices Sent in Error

The IRS sent out CP283-C penalty notices informing plan sponsors of late or incomplete filing of a Form 8955-SSA as the result of a system problem. The issue has been corrected, and plan sponsors who received notices dated prior to September 1, 2023,do not need to take action if they have filed their Form 8955-SSAin a timely and complete manner. The IRS can be contacted with questions at 877-829-5500.

Disaster Relief for South Carolina, Georgia, Maine, and Massachusetts

Individuals who reside or have a business in any of the following areas may be eligible for deadline relief.

  • South Carolina--certain deadlines occurring between August 29, 2023, and February 15, 2024,are extended to February 15, 2024, in any of the 46 counties
  • Georgia--certain deadlines occurring between August 30, 2023, and February 15, 2024, are extended to February 15, 2024, in Appling, Atkinson, Bacon, Berrien, Brantley, Brooks, Bulloch, Camden, Candler, Charlton, Clinch, Coffee, Colquitt, Cook, Echols, Emanuel, Glynn, Jeff Davis, Jenkins, Lanier, Lowndes, Pierce, Screven, Tattnall, Thomas, Tift, Ware, and Wayne Counties
  • Maine--certain deadlines occurring between September 15, 2023,and February 15, 2024, are extended to February 15, 2024,in Androscoggin, Aroostook, Cumberland, Franklin, Hancock, Kennebec, Knox, Lincoln, Oxford, Penobscot, Piscataquis, Sagadahoc, Somerset, Waldo, Washington, and York Counties
  • Massachusetts--certain deadlines occurring between September 15, 2023, and February 15, 2024, are extended to February 15, 2024, in Barnstable, Berkshire, Bristol, Dukes, Essex, Franklin, Hampden, Hampshire, Middlesex, Nantucket, Norfolk, Plymouth, Suffolk, and Worcester 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 5498 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 or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

Insurance products and plan administrative services provided through Principal Life Insurance Company®, a member of the Principal Financial Group®, Des Moines, IA 50392.

Principal Life Insurance Company, Des Moines, Iowa 50392-0001, www.principal.com, Principal®, Principal Financial Group® and the Principal logo design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and service marks of Principal Financial Services, Inc., in various countries around the world.

© 2023 Principal Financial Services, Inc.

PQ11297OCT23

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