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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
On December 21, 2005, President Bush signed the Gulf Opportunity Zone (GO Zone) Act of 2005 (H.R. 4440). The hurricane tax relief bill codifies and expands the pension-related relief provided under the Katrina Emergency Tax Relief Act of 2005 (KETRA) (P.L. 109-73) to include victims of Hurricanes Rita and Wilma. The measure also includes tax technical corrections provisions related to the American Jobs Creation Act of 2004 (P.L. 108-357), the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) and other recently enacted legislation.
KETRA relief would be expanded to any "qualified hurricane distribution," which is defined also to include distributions relating to Hurricanes Rita and Wilma. The hurricane relief measure would waive the 10% penalty tax for premature distributions from IRAs and qualified retirement plans for individuals who suffered an economic loss because of Hurricanes Rita or Wilma and whose principal residence is located in the Rita or Wilma disaster areas.
Individuals eligible for this special treatment would be permitted to pay income tax on such distributions ratably over a three-year period. Amounts distributed could be re-contributed to a qualified retirement plan over the three-year period following the distribution date and receive rollover treatment. The waiver of the 10% penalty, 3-year income averaging, and recontribution provisions for hurricane-related retirement plan withdrawals would be limited to $100,000 per individual.
Distributions for home purchases that were not finalized because of Hurricanes Rita or Wilma could also be re-contributed to a qualified retirement plan or IRA. Limitations on loans from qualified employer plans would be increased for Hurricane Rita and Hurricane Wilma victims by doubling the thresholds to the lesser of $100,000 or 100 percent of the individual's account balance. Payments due from hurricane victims on qualified plan loans on or after August 25, 2005, and before January 1, 2007, could be deferred, and twelve months could be added to the maximum repayment period of affected loans.
A special rule allows employees with at least 15 years of service with certain organizations to make additional elective deferrals to a tax deferred annuity, subject to an annual and a cumulative limit. The cumulative limit is $15,000 reduced by any additional pretax elective deferrals made for preceding years. For tax years beginning after 2005, under a technical correction to EGTRRA included in the Katrina relief package, plans may allow employees to designate pretax elective deferrals as Roth contributions. Under the provision, the $15,000 cumulative limit is reduced also by designated Roth contributions made for preceding years.
For more information on this and related topics, consult the CCH Pension Plan Guide.
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