Credit Where Credit Is Due: IRS Offers Long-Sought Guidance on Employer Retention Credit Program

As we previously reported, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) provided for an employee retention credit (“ERC”) designed to encourage employers to retain workers during the COVID-19 crisis.  In general, the ERC permits eligible employers to claim a refundable tax credit of a portion of qualified wages paid to employees over a given period.

Initially, the IRS issued guidance on ERCs in the form of online Frequently Asked Questions (the “FAQs”).  The FAQs were non-binding and subject to change.  As of March 1, 2021, the IRS published formal rules with respect to ERCs in Notice 2021-20 (the “Notice”).  Read More ›

Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans | Tagged , , , , , , ,

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Get Ready, Get Set, to Cover COVID-19 Vaccines for Free

Last month, we reported that Moderna was seeking FDA authorization for its COVID-19 vaccine and reminded readers about the immunization coverage requirements in Section 3202 of the CARES Act in our SW Benefits Blog, “Free COVID-19 Vaccine and Testing Update.”  As of the date of this blog, the Moderna and Pfizer-BioNTech COVID-19 vaccines have been approved and group health plans must act quickly to meet the requirements of the CARES Act.

On October 28, 2020, HHS, DOL, and the Treasury issued interim final rules (the “new regulations”) about the COVID-19 immunization coverage requirements.  The new regulations generally took effect November 2, 2020 and are effective until the end of the COVID-19 public health emergency declared by HHS.  Read More ›

Posted in Employee Benefits, Health & Welfare Plans | Tagged , ,

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COVID-19-Related Cancellations of NQDC Elections

As a general matter, deferral elections under non-qualified deferred compensation plans (“NQDCs”) cannot be cancelled unless a NQDC plan participant incurs an “unforeseeable emergency” or “disability” as each such term is defined in Section 409A of the Internal Revenue Code. Internal Revenue Service Notice 2020-50 (the “Notice”) adds a third reason to permit the cancellation of NQDC elections, the receipt of a coronavirus-related distribution (“CRD”) from a qualified retirement plan.

The Internal Revenue Service issued the Notice on June 19th to, among other things, help plan sponsors allow plan participants to take advantage of the provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) by giving participants greater access to their retirement plan savings. Read More ›

Posted in Executive Compensation | Tagged , , , , , , ,

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In Case You Missed It … Recent Posts From the SW Benefits Update

We periodically consolidate our prior blog posts and push them out as a single package to help individuals catch up on what they might have missed with respect to important health and welfare, qualified retirement plan, and executive compensation issues.  The posts highlighted here largely focus on the CARES Act and the impact the COVID-19 pandemic is having on employee benefit and executive compensation plans.  As always, please feel free to reach out to any member of our employee benefits and executive compensation group with questions.  Please enjoy (and have a safe) Memorial Day weekend!

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Posted in Employee Benefits, Executive Compensation, Health & Welfare Plans, Health Care Reform, Qualified Retirement Plans | Tagged , , , , , ,

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CARES Act Enables Employers to Assist with Student Loan Repayments

The Coronavirus Aid Relief and Economic Security Act (the “CARES Act”), signed into law on March 27, 2020, provides employers with a new mechanism to assist their employees with repayment of student loans. Section 2206 of the CARES Act amends Section 127 of the Internal Revenue Code (the “Code”) to allow employers to pay up to $5,250 toward qualified education loans as part of an educational assistance program as long as the payments are made before January 1, 2021. Employers can make payments either directly to the employee or to a lender.

Section 127 provides that amounts paid or expenses incurred by employers under an educational assistance program for the educational assistance of employees are not included in the employee’s gross income, provided that the program satisfies the following requirements:

  1. The program must be a separate written plan of the employer for the exclusive benefit of its employees to provide such employees with educational assistance. 
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Posted in Employee Benefits, Health & Welfare Plans | Tagged , , , , ,

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