IRA

The House Ways and Means Committee has released draft legislative text as part of what is currently planned to be a $3.5 trillion tax and spending package. The proposal would require employers without an employer-sponsored retirement plan to automatically enroll their employees in an automatic IRA plan or other retirement arrangement at a rate of at least 6 percent and increasing annually to 10 percent of compensation beginning in 2023. Representative Richard Neal (D-MA) previously proposed such legislation under the Automatic Retirement Plan Act of 2017. The current proposal exempts employers with 5 or fewer employees earning at least $5,000, or those that have been in business for less than 2 years from these requirements. The legislation includes enhancements to credits for small employers to offset plan costs and imposes an excise tax of $10 per participant per day to employers that fail to provide an automatic arrangement.

The IRS has issued news releases IR-2021-175 and LA-2021-04 announcing the postponement of certain tax-related deadlines for Hurricane Ida victims in Louisiana. The tax relief postpones various tax filing deadlines that began August 26, 2021. Affected individuals and households who reside or have a business anywhere in the state of Louisiana, as well as taxpayers with records located in the covered area that are needed to meet covered deadlines qualify for relief. This relief will be automatically granted to taxpayers in Ida-impacted locations in neighboring states designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance.

Senators Bill Cassidy (R-LA) and Robert Menendez (D-NJ) have introduced legislation that would make permanent certain rules for distributions and loans from retirement plans and IRAs in connection with federally declared disasters. This legislation is intended to aid victims by providing consistent treatment of and improving response times associated with disaster relief.

Senator Patrick Toomey (R-PA), has re-introduced the Long-Term Care Affordability Act, legislation that would permit tax-free retirement saving distributions of up to $2,500 per year—indexed for inflation—that are used to purchase long-term care insurance. The arrangements to which the legislation applies would include qualified retirement plans, 403(a) and 403(b) plans, governmental 457(b) plans, and IRAs.

Senate Finance Committee Chair Ron Wyden (D-OR) and six other Democratic Senators have introduced the Encouraging Americans to Save Act (EASA).

The legislation is similar to past proposals introduced by Senator Wyden and other co-sponsors and includes the following.

The IRS has released a pre-publication version of proposed regulations amending rules intended to increase the filing of electronic returns in accordance with the Taxpayer First Act of 2019. Additionally, the IRS has withdrawn previously proposed regulations regarding electronic filing that were published on May 31, 2018.

The IRS has issued a news release announcing the postponement of certain tax-related deadlines for Michigan victims of severe storms, flooding, and tornadoes. The tax relief postpones various tax filing and payment deadlines that occurred starting June 25. Individuals and households that were affected and reside in the Washtenaw and Wayne counties, as well as taxpayers with records located in the covered area needed to meet covered deadlines qualify for relief.

The IRS has released final regulations regarding the mandatory 60-day postponement of deadlines for certain time-sensitive, tax-related acts in circumstances of federally declared disasters, implemented under the Further Consolidated Appropriations Act of 2020.

The IRS has issued a news release announcing the postponement of certain tax-related deadlines for Louisiana victims of severe storms and flooding. The tax relief postpones various tax filing and payment deadlines that occurred starting May 17. The areas included in the relief are Ascension, Calcasieu, East Baton Rouge, Iberville, and Lafayette parishes.

Senator John Kennedy (R-LA) has introduced the Increasing Retirement Amount Act to allow individuals without access to a workplace retirement plan to save more for retirement by providing an increased IRA contribution limit of $12,000 per year, subject to annual cost of living adjustments. The special rule would also allow catch-up contributions of up to $3,000 per year for those age 50 or older.