83 FR 34469 - Definitions of Qualified Matching Contributions and Qualified Nonelective Contributions
DEPARTMENT OF THE TREASURY
Internal Revenue Service Federal Register Volume 83, Issue 140 (July 20, 2018)
Internal Revenue Service
Federal Register Volume 83, Issue 140 (July 20, 2018)
| Page Range | 34469-34471 | |
| FR Document | 2018-15495 |
[Federal Register Volume 83, Number 140 (Friday, July 20, 2018)] [Rules and Regulations] [Pages 34469-34471] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-15495] ======================================================================== Rules and Regulations Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. ======================================================================== Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Rules and Regulations [[Page 34469]] DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9835] RIN-1545-BN05 Definitions of Qualified Matching Contributions and Qualified Nonelective Contributions AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final regulations. ----------------------------------------------------------------------- SUMMARY: This document contains final regulations that amend the definitions of qualified matching contributions (QMACs) and qualified nonelective contributions (QNECs) under regulations regarding certain qualified retirement plans that contain cash or deferred arrangements under section 401(k) or that provide for matching contributions or employee contributions under section 401(m). Under these regulations, an employer contribution to a plan may be a QMAC or QNEC if it satisfies applicable nonforfeitability requirements and distribution limitations at the time it is allocated to a participant's account, but need not meet these requirements or limitations when it is contributed to the plan. These regulations affect participants in, beneficiaries of, employers maintaining, and administrators of tax-qualified plans that contain cash or deferred arrangements or provide for matching contributions or employee contributions. DATES: Effective date. These regulations are effective July 20, 2018. Applicability date. These regulations apply to plan years beginning on or after July 20, 2018. However, taxpayers may apply these regulations to earlier periods. FOR FURTHER INFORMATION CONTACT: Angelique Carrington at (202) 317-4148 (not a toll-free number). SUPPLEMENTARY INFORMATION: Background Section 401(k)(1) provides that a profit-sharing or stock bonus plan, a pre-ERISA money purchase plan, or a rural cooperative plan will not be considered as failing to satisfy the requirements of section 401(a) merely because the plan includes a qualified cash or deferred arrangement (CODA). To be considered a qualified CODA, a plan must satisfy several requirements, including: (i) Under section 401(k)(2)(B), amounts held by the plan's trust that are attributable to employer contributions made pursuant to an employee's election must satisfy certain distribution limitations; (ii) under section 401(k)(2)(C), an employee's right to such employer contributions must be nonforfeitable; and (iii) under section 401(k)(3), such employer contributions must satisfy certain nondiscrimination requirements. Under section 401(k)(3)(D)(ii), the employer contributions taken into account for purposes of applying the nondiscrimination requirements may, under such rules as the Secretary may provide and at the election of the employer, include matching contributions within the meaning of section 401(m)(4)(A) that meet the distribution limitations and nonforfeitability requirements of section 401(k)(2)(B) and (C) (also referred to as qualified matching contributions or QMACs) and qualified nonelective contributions within the meaning of section 401(m)(4)(C) (QNECs). Under section 401(m)(4)(C), a QNEC is an employer contribution, other than a matching contribution, with respect to which the distribution limitations and nonforfeitability requirements of section 401(k)(2)(B) and (C) are met. Under Sec. 1.401(k)-1(b)(1)(ii), a CODA satisfies the applicable nondiscrimination requirements if it satisfies the actual deferral percentage (ADP) test of section 401(k)(3), described in Sec. 1.401(k)-2. The ADP test limits the disparity permitted between the percentage of compensation made as employer contributions to the plan for a plan year on behalf of eligible highly compensated employees and the percentage of compensation made as employer contributions on behalf of eligible nonhighly compensated employees. If the ADP test limits are exceeded, the employer must take corrective action to ensure that the limits are met. In determining the amount of employer contributions made on behalf of an eligible employee, employers are allowed to take into account certain QMACs and QNECs made on behalf of the employee by the employer. In lieu of applying the ADP test, an employer may choose to design its plan to satisfy an ADP safe harbor, including the ADP safe harbor provisions of section 401(k)(12), described in Sec. 1.401(k)-3. Under Sec. 1.401(k)-3, a plan satisfies the ADP safe harbor provisions of section 401(k)(12) if, among other things, it satisfies certain contribution requirements. With respect to the safe harbor under section 401(k)(12), an employer may choose to satisfy the contribution requirement by providing a certain level of QMACs or QNECs to eligible nonhighly compensated employees under the plan. A defined contribution plan that provides for matching or employee after-tax contributions must satisfy the nondiscrimination requirements under section 401(m) with respect to those contributions for each plan year. Under Sec. 1.401(m)-1(b)(1), the matching contributions and employee contributions under a plan satisfy the nondiscrimination requirements for a plan year if the plan satisfies the actual contribution percentage (ACP) test of section 401(m)(2) described in Sec. 1.401(m)-2. The ACP test limits the disparity permitted between the percentage of compensation made as matching contributions and after-tax employee contributions for or by eligible highly compensated employees under the plan and the percentage of compensation made as matching contributions and after-tax employee contributions for or by eligible nonhighly compensated employees under the plan. If the ACP test limits are exceeded, the employer must take corrective action to ensure that the limits are met. In determining the amount of employer contributions made on behalf of an eligible employee, employers are allowed to take into account certain QNECs made on behalf of the employee by the employer. Employers must also take into account QMACs made on behalf of the employee by the employer unless an exclusion applies (including an exclusion for [[Page 34470]] QMACs that are taken into account under the ADP test). If an employer designs its plan to satisfy the ADP safe harbor of section 401(k)(12), it may avoid performing the ACP test with respect to matching contributions under the plan, as long as the additional requirements of the ACP safe harbor of section 401(m)(11) are met. As defined in Sec. 1.401(k)-6, QMACs and QNECs must satisfy the nonforfeitability requirements of Sec. 1.401(k)-1(c) and the distribution limitations \1\ of Sec. 1.401(k)-1(d) ``when they are contributed to the plan.'' Similarly, under the independent definitions in Sec. 1.401(m)-5, QMACs and QNECs must satisfy the nonforfeitability requirements of Sec. 1.401(k)-1(c) and the distribution limitations of Sec. 1.401(k)-1(d) ``at the time the contribution is made.'' In general, contributions satisfy the nonforfeitability requirements of Sec. 1.401(k)-1(c) if they are immediately nonforfeitable within the meaning of section 411, and contributions satisfy the distribution limitations of Sec. 1.401(k)-1(d) if they may not be distributed before the employee's death, disability, severance from employment, attainment of age 59\1/2\, or hardship, or upon the termination of the plan. --------------------------------------------------------------------------- \1\ The existing definitions of QMACs and QNECs in Sec. Sec. 1.401(k)-6 and 1.401(m)-5 refer to the distribution requirements of Sec. 1.401(k)-1(d). Section 1.401(k)-1(d) is more appropriately characterized as providing distribution limitations (consistent with the heading of Sec. 1.401(k)-1d)). Accordingly, this preamble refers to distribution limitations rather than distribution requirements, and, as noted in the Explanation of Provisions section of this preamble, the definitions of QMACs and QNECs in Sec. Sec. 1.401(k)-6 and 1.401(m)-5 are amended in the final regulations to refer to distribution limitations. --------------------------------------------------------------------------- Before 2017, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) received comments with respect to the definitions of QMACs and QNECs in Sec. Sec. 1.401(k)-6 and 1.401(m)-5. In particular, commenters asserted that employer contributions should qualify as QMACs and QNECs as long as they satisfy applicable nonforfeitability requirements at the time they are allocated to participants' accounts, rather than when they are first contributed to the plan. Commenters pointed out that interpreting sections 401(k)(3)(D)(ii) and 401(m)(4)(C) to require satisfaction of applicable nonforfeitability requirements at the time amounts are first contributed to the plan would preclude plan sponsors with plans that permit the use of amounts in plan forfeiture accounts to offset future employer contributions under the plan from applying such amounts to fund QMACs and QNECs. This is because the amounts would have been allocated to the forfeiture accounts only after a participant incurred a forfeiture of benefits and, thus, generally would have been subject to a vesting schedule when they were first contributed to the plan. Commenters requested that QMAC and QNEC requirements not be interpreted to prevent the use of plan forfeitures to fund QMACs and QNECs. The commenters urged that the nonforfeitability requirements under Sec. 1.401(k)-6 should apply when QMACs and QNECs are allocated to participants' accounts and not when the contributions are first made to the plan. In considering the comments, the Treasury Department and the IRS took into account that the nonforfeitability requirements applicable to QMACs and QNECs are intended to ensure that QMACs and QNECS provide nonforfeitable benefits for the participants who receive them. In accordance with that purpose, the Treasury Department and the IRS concluded that it is sufficient to require that amounts allocated to participants' accounts as QMACs and QNECs be nonforfeitable at the time they are allocated to participants' accounts, rather than when such contributions are made to the plan. Accordingly, on January 18, 2017, the Treasury Department and the IRS issued a notice of proposed rulemaking (REG-131643-15), which was published in the Federal Register (82 FR 5477). Under the notice of proposed rulemaking, the Treasury Department and the IRS proposed to amend Sec. 1.401(k)-6 to provide that amounts used to fund QMACs and QNECs must be nonforfeitable and subject to distribution limitations in accordance with Sec. 1.401(k)-1(c) and (d) when allocated to participants' accounts, and to no longer require that amounts used to fund QMACs and QNECs satisfy the nonforfeitability requirements and distribution limitations when they are first contributed to the plan. As a result, forfeitures would be permitted to be used to fund QMACs and QNECs. No public hearing on the notice of proposed rulemaking was requested or held. Several comments on the proposed rules were submitted, and, after consideration of all the comments, the proposed regulations are adopted without substantive modification. This document contains amendments to 26 CFR part 1. Explanation of Provisions This document contains final regulations that amend the definitions of QMACs and QNECs to provide that employer contributions to a plan are QMACs or QNECs if they satisfy applicable nonforfeitability requirements and distribution limitations at the time they are allocated to participants' accounts. Accordingly, these regulations permit forfeitures of prior contributions to be used to fund QMACs and QNECs. The Treasury Department and the IRS received five comments in response to the notice of proposed rulemaking that raised issues relating to the modification of the QMAC and QNEC definitions, including issues with respect to plan amendments and the pre-approved plan program, as described in Rev. Proc. 2015-36, 2015-27 I.R.B. 20, Part III of Rev. Proc. 2016-37, 2016-29 I.R.B. 136, and Rev. Proc. 2017-41, 2017-29 I.R.B. 92. The Treasury Department and the IRS determined that the comments relating to the pre-approved plan program are outside the scope of these regulations, which relate solely to the modification of the definitions of QMACs and QNECs. These comments have been shared with IRS Tax Exempt and Government Entities, Employee Plans, which administers the pre-approved plan program. The comments also included questions relating to the application of section 411(d)(6) in cases in which a plan sponsor seeks to amend its plan to apply the rules in this regulation. The application of section 411(d)(6) is generally outside the scope of these regulations. However, if a plan sponsor adopts a plan amendment to define QMACs and QNECs in a manner consistent with these final regulations and applies that amendment prospectively to future plan years, section 411(d)(6) would not be implicated. Moreover, in the common case of a plan that provides that forfeitures will be used to pay plan expenses incurred during a plan year and that any remaining forfeitures in the plan at the end of the plan year will be allocated pursuant to a specified formula among active participants who have completed a specified number of hours of service during the plan year, section 411(d)(6) would not prohibit a plan amendment adopted before the end of the plan year that permits the use of forfeitures to fund QMACs and QNECs (even if, at the time of the amendment, one or more participants had already completed the specified number of hours of service). This is because all conditions for receiving an allocation will not have been satisfied at the time of the amendment, since one of the conditions for receiving an allocation is that plan expenses at the end of the plan year are less than the amount of [[Page 34471]] forfeitures. See Sec. 1.411(d)-4, Q&A-1(d)(8) (features that are not section 411(d)(6) protected benefits include ``[t]he allocation dates for contributions, forfeitures, and earnings, the time for making contributions (but not the conditions for receiving an allocation of contributions or forfeitures for a plan year after such conditions have been satisfied), and the valuation dates for account balances''). These regulations are substantively the same as the proposed regulations. However, the Treasury Department and the IRS have determined that the distribution requirements referred to in the existing definitions of QMACs and QNECs in Sec. Sec. 1.401(k)-6 and 1.401(m)-5 are more appropriately characterized as distribution limitations (consistent with the heading of Sec. 1.401(k)-1(d)), and, accordingly, these definitions have been amended to refer to distribution limitations. Effective/Applicability Date These regulations are effective on July 20, 2018. These regulations apply to plan years beginning on or after July 20, 2018. However, taxpayers may apply these regulations to earlier periods. Special Analyses This regulation is not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (April 11, 2018) between the Department of the Treasury and the Office of Management and Budget regarding review of tax regulations. Because the regulation does not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. Statement of Availability of IRS Documents IRS Revenue Procedures, Revenue Rulings, notices and other guidance cited in this preamble are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at http://www.irs.gov. Drafting Information The principal author of these regulations is Angelique Carrington, Office of Associate Chief Counsel (Tax Exempt and Governmental Entities). However, other personnel from the IRS and Treasury Department participated in the development of these regulations. List of Subjects in 26 CFR Part 1 Income taxes, Reporting and recordkeeping requirements. Adoption of Amendments to the Regulations Accordingly, 26 CFR part 1 is amended as follows: PART 1--INCOME TAXES 0 Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority: 26 U.S.C. 401(m)(9) and 26 U.S.C. 7805. * * * 0 Par. 2. Section 1.401(k)-1 is amended by adding paragraph (g)(5) to read as follows: Sec. 1.401(k)-1 Certain cash or deferred arrangements. * * * * * (g) * * * (5) Applicability date for definitions of qualified matching contributions (QMACs) and qualified nonelective contributions (QNECs). The revisions to the second sentence in the definitions of QMACs and QNECs in Sec. 1.401(k)-6 apply to plan years ending on or after July 20, 2018. 0 Par. 3. Section 1.401(k)-6 is amended by revising the second sentence in the definitions of Qualified matching contributions (QMACs) and Qualified nonelective contributions (QNECs) to read as follows: Sec. 1.401(k)-6 Definitions. * * * * * Qualified matching contributions (QMACs). * * * Thus, the matching contributions must satisfy the nonforfeitability requirements of Sec. 1.401(k)-1(c) and be subject to the distribution limitations of Sec. 1.401(k)-1(d) when they are allocated to participants' accounts. * * * Qualified nonelective contributions (QNECs). * * * Thus, the nonelective contributions must satisfy the nonforfeitability requirements of Sec. 1.401(k)-1(c) and be subject to the distribution limitations of Sec. 1.401(k)-1(d) when they are allocated to participants' accounts. * * * * * 0 Par. 4. Section 1.401(m)-1 is amended by adding paragraph (d)(4) to read as follows: Sec. 1.401(m)-1 Employee contributions and matching contributions. * * * * * (d) * * * (4) Effective date for definitions of qualified matching contributions (QMACs) and qualified nonelective contributions (QNECs). The revisions to the definitions of QMACs and QNECs in Sec. 1.401(m)-5 apply to plan years ending on or after July 20, 2018. 0 Par. 5. Section 1.401(m)-5 is amended by revising the definitions of Qualified matching contributions (QMACs) and Qualified nonelective contributions (QNECs) to read as follows: Sec. 1.401(m)-5 Definitions. * * * * * Qualified matching contributions (QMACs). Qualified matching contributions or QMACs means qualified matching contributions or QMACs as defined in Sec. 1.401(k)-6. Qualified nonelective contributions (QNECs). Qualified nonelective contributions or QNECs means qualified nonelective contributions or QNECs as defined in Sec. 1.401(k)-6. Kirsten Wielobob, Deputy Commissioner for Services and Enforcement. Approved: July 13, 2018. David J. Kautter, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 2018-15495 Filed 7-19-18; 8:45 am] BILLING CODE 4830-01-P
![34469
Rules and Regulations Federal Register
Vol. 83, No. 140
Friday, July 20, 2018
This section of the FEDERAL REGISTER SUPPLEMENTARY INFORMATION: exceeded, the employer must take
contains regulatory documents having general corrective action to ensure that the
applicability and legal effect, most of which Background
limits are met. In determining the
are keyed to and codified in the Code of Section 401(k)(1) provides that a amount of employer contributions made
Federal Regulations, which is published under profit-sharing or stock bonus plan, a on behalf of an eligible employee,
50 titles pursuant to 44 U.S.C. 1510.
pre-ERISA money purchase plan, or a employers are allowed to take into
The Code of Federal Regulations is sold by rural cooperative plan will not be account certain QMACs and QNECs
the Superintendent of Documents. considered as failing to satisfy the made on behalf of the employee by the
requirements of section 401(a) merely employer.
because the plan includes a qualified In lieu of applying the ADP test, an
DEPARTMENT OF THE TREASURY cash or deferred arrangement (CODA). employer may choose to design its plan
To be considered a qualified CODA, a to satisfy an ADP safe harbor, including
Internal Revenue Service plan must satisfy several requirements, the ADP safe harbor provisions of
including: (i) Under section section 401(k)(12), described in
26 CFR Part 1 401(k)(2)(B), amounts held by the plan’s § 1.401(k)–3. Under § 1.401(k)–3, a plan
[TD 9835] trust that are attributable to employer satisfies the ADP safe harbor provisions
contributions made pursuant to an of section 401(k)(12) if, among other
RIN–1545–BN05
employee’s election must satisfy certain things, it satisfies certain contribution
Definitions of Qualified Matching distribution limitations; (ii) under requirements. With respect to the safe
Contributions and Qualified section 401(k)(2)(C), an employee’s right harbor under section 401(k)(12), an
Nonelective Contributions to such employer contributions must be employer may choose to satisfy the
nonforfeitable; and (iii) under section contribution requirement by providing a
AGENCY: Internal Revenue Service (IRS), 401(k)(3), such employer contributions certain level of QMACs or QNECs to
Treasury. must satisfy certain nondiscrimination eligible nonhighly compensated
ACTION: Final regulations. requirements. employees under the plan.
Under section 401(k)(3)(D)(ii), the A defined contribution plan that
SUMMARY: This document contains final
employer contributions taken into provides for matching or employee
regulations that amend the definitions
account for purposes of applying the after-tax contributions must satisfy the
of qualified matching contributions
nondiscrimination requirements may, nondiscrimination requirements under
(QMACs) and qualified nonelective
under such rules as the Secretary may section 401(m) with respect to those
contributions (QNECs) under
provide and at the election of the contributions for each plan year. Under
regulations regarding certain qualified
employer, include matching § 1.401(m)–1(b)(1), the matching
retirement plans that contain cash or
contributions within the meaning of contributions and employee
deferred arrangements under section
section 401(m)(4)(A) that meet the contributions under a plan satisfy the
401(k) or that provide for matching
distribution limitations and nondiscrimination requirements for a
contributions or employee contributions
nonforfeitability requirements of section plan year if the plan satisfies the actual
under section 401(m). Under these
401(k)(2)(B) and (C) (also referred to as contribution percentage (ACP) test of
regulations, an employer contribution to
qualified matching contributions or section 401(m)(2) described in
a plan may be a QMAC or QNEC if it
QMACs) and qualified nonelective § 1.401(m)–2.
satisfies applicable nonforfeitability
contributions within the meaning of The ACP test limits the disparity
requirements and distribution
section 401(m)(4)(C) (QNECs). Under permitted between the percentage of
limitations at the time it is allocated to
section 401(m)(4)(C), a QNEC is an compensation made as matching
a participant’s account, but need not
employer contribution, other than a contributions and after-tax employee
meet these requirements or limitations
matching contribution, with respect to contributions for or by eligible highly
when it is contributed to the plan. These
which the distribution limitations and compensated employees under the plan
regulations affect participants in,
nonforfeitability requirements of section and the percentage of compensation
beneficiaries of, employers maintaining,
401(k)(2)(B) and (C) are met. made as matching contributions and
and administrators of tax-qualified
plans that contain cash or deferred Under § 1.401(k)–1(b)(1)(ii), a CODA after-tax employee contributions for or
arrangements or provide for matching satisfies the applicable by eligible nonhighly compensated
contributions or employee nondiscrimination requirements if it employees under the plan. If the ACP
contributions. satisfies the actual deferral percentage test limits are exceeded, the employer
(ADP) test of section 401(k)(3), must take corrective action to ensure
DATES: Effective date. These regulations described in § 1.401(k)–2. The ADP test that the limits are met. In determining
are effective July 20, 2018. limits the disparity permitted between the amount of employer contributions
Applicability date. These regulations the percentage of compensation made as made on behalf of an eligible employee,
apply to plan years beginning on or after employer contributions to the plan for a employers are allowed to take into
daltland on DSKBBV9HB2PROD with RULES
July 20, 2018. However, taxpayers may plan year on behalf of eligible highly account certain QNECs made on behalf
apply these regulations to earlier compensated employees and the of the employee by the employer.
periods. percentage of compensation made as Employers must also take into account
FOR FURTHER INFORMATION CONTACT: employer contributions on behalf of QMACs made on behalf of the employee
Angelique Carrington at (202) 317–4148 eligible nonhighly compensated by the employer unless an exclusion
(not a toll-free number). employees. If the ADP test limits are applies (including an exclusion for
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![Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Rules and Regulations 34471
forfeitures. See § 1.411(d)–4, Q&A– Exempt and Governmental Entities). (d) * * *
1(d)(8) (features that are not section However, other personnel from the IRS (4) Effective date for definitions of
411(d)(6) protected benefits include and Treasury Department participated qualified matching contributions
‘‘[t]he allocation dates for contributions, in the development of these regulations. (QMACs) and qualified nonelective
forfeitures, and earnings, the time for List of Subjects in 26 CFR Part 1 contributions (QNECs). The revisions to
making contributions (but not the the definitions of QMACs and QNECs in
conditions for receiving an allocation of Income taxes, Reporting and § 1.401(m)–5 apply to plan years ending
contributions or forfeitures for a plan recordkeeping requirements. on or after July 20, 2018.
year after such conditions have been Adoption of Amendments to the ■ Par. 5. Section 1.401(m)–5 is
satisfied), and the valuation dates for Regulations amended by revising the definitions of
account balances’’). Qualified matching contributions
These regulations are substantively Accordingly, 26 CFR part 1 is
amended as follows: (QMACs) and Qualified nonelective
the same as the proposed regulations. contributions (QNECs) to read as
However, the Treasury Department and PART 1—INCOME TAXES follows:
the IRS have determined that the
distribution requirements referred to in ■ Paragraph 1. The authority citation § 1.401(m)–5 Definitions.
the existing definitions of QMACs and for part 1 continues to read in part as * * * * *
QNECs in §§ 1.401(k)–6 and 1.401(m)–5 follows: Qualified matching contributions
are more appropriately characterized as Authority: 26 U.S.C. 401(m)(9) and 26 (QMACs). Qualified matching
distribution limitations (consistent with U.S.C. 7805. * * * contributions or QMACs means
the heading of § 1.401(k)–1(d)), and, ■ Par. 2. Section 1.401(k)–1 is amended qualified matching contributions or
accordingly, these definitions have been by adding paragraph (g)(5) to read as QMACs as defined in § 1.401(k)–6.
amended to refer to distribution follows: Qualified nonelective contributions
limitations. (QNECs). Qualified nonelective
§ 1.401(k)–1 Certain cash or deferred contributions or QNECs means qualified
Effective/Applicability Date arrangements. nonelective contributions or QNECs as
These regulations are effective on July * * * * * defined in § 1.401(k)–6.
20, 2018. (g) * * *
These regulations apply to plan years (5) Applicability date for definitions Kirsten Wielobob,
beginning on or after July 20, 2018. of qualified matching contributions Deputy Commissioner for Services and
However, taxpayers may apply these (QMACs) and qualified nonelective Enforcement.
regulations to earlier periods. contributions (QNECs). The revisions to Approved: July 13, 2018.
the second sentence in the definitions of David J. Kautter,
Special Analyses
QMACs and QNECs in § 1.401(k)–6 Assistant Secretary of the Treasury (Tax
This regulation is not subject to apply to plan years ending on or after Policy).
review under section 6(b) of Executive July 20, 2018. [FR Doc. 2018–15495 Filed 7–19–18; 8:45 am]
Order 12866 pursuant to the ■ Par. 3. Section 1.401(k)–6 is amended BILLING CODE 4830–01–P
Memorandum of Agreement (April 11, by revising the second sentence in the
2018) between the Department of the definitions of Qualified matching
Treasury and the Office of Management contributions (QMACs) and Qualified DEPARTMENT OF DEFENSE
and Budget regarding review of tax nonelective contributions (QNECs) to
regulations. Because the regulation does read as follows: Office of the Secretary
not impose a collection of information
on small entities, the Regulatory § 1.401(k)–6 Definitions.
32 CFR Part 175
Flexibility Act (5 U.S.C. chapter 6) does * * * * *
not apply. Pursuant to section 7805(f) of Qualified matching contributions RIN 0790–AJ54
the Internal Revenue Code, the notice of (QMACs). * * * Thus, the matching [Docket ID: DOD–2016–OS–0108]
proposed rulemaking preceding these contributions must satisfy the
regulations was submitted to the Chief nonforfeitability requirements of Indemnification or Defense, or
Counsel for Advocacy of the Small § 1.401(k)–1(c) and be subject to the Providing Notice to the Department of
Business Administration for comment distribution limitations of § 1.401(k)– Defense, Relating to a Third-Party
on its impact on small business. 1(d) when they are allocated to Environmental Claim
participants’ accounts. * * *
Statement of Availability of IRS Qualified nonelective contributions AGENCY: Department of Defense (DoD).
Documents (QNECs). * * * Thus, the nonelective ACTION: Final rule.
IRS Revenue Procedures, Revenue contributions must satisfy the
Rulings, notices and other guidance nonforfeitability requirements of SUMMARY: The DoD is identifying the
cited in this preamble are published in § 1.401(k)–1(c) and be subject to the proper address and notification method
the Internal Revenue Bulletin (or distribution limitations of § 1.401(k)– for an entity making a request for
Cumulative Bulletin) and are available 1(d) when they are allocated to indemnification or defense, or providing
from the Superintendent of Documents, participants’ accounts. notice to DoD, of a third-party claim
U.S. Government Publishing Office, * * * * * under section 330 of the National
Defense Authorization Act for Fiscal
daltland on DSKBBV9HB2PROD with RULES
Washington, DC 20402, or by visiting ■ Par. 4. Section 1.401(m)–1 is amended
the IRS website at http://www.irs.gov. by adding paragraph (d)(4) to read as Year 1993, as amended (hereinafter
follows: ‘‘section 330’’), or under section 1502(e)
Drafting Information of the Floyd D. Spence National Defense
The principal author of these § 1.401(m)–1 Employee contributions and Authorization Act for Fiscal Year 2001,
regulations is Angelique Carrington, matching contributions. (hereinafter ‘‘section 1502(e)’’). This
Office of Associate Chief Counsel (Tax * * * * * rule also identifies the documentation
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Document Created: 2018-07-20 01:18:52
Document Modified: 2018-07-20 01:18:52
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final regulations. | |
| Dates | Effective date. These regulations are effective July 20, 2018. | |
| Contact | Angelique Carrington at (202) 317-4148 (not a toll-free number). | |
| FR Citation | 83 FR 34469 | |
| CFR Associated | Income Taxes and Reporting and Recordkeeping Requirements |
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