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IRS proposes rules on qualified matching contributions and qualified nonelective contributions

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Tax Hot Topics: IRS proposes rules on qualified matching contributions and qualified nonelective contributionsThe IRS released proposed regulations (REG-131643-15) that would amend the definitions of qualified matching contributions (QMACs) and qualified nonelective contributions (QNECs) under regulations relating to 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 proposed regulations, employer contributions to a plan would be able to qualify as QMACs or QNECs if they satisfy applicable nonforfeitability and distribution requirements at the time they are allocated to participants’ accounts. However, they need not meet these requirements when they are contributed to the plan. These regulations would affect participants in, beneficiaries of, employers maintaining and administrators of tax-qualified plans that contain cash or deferred arrangements or that provide for matching contributions or employee contributions.

The proposed regulations would apply to taxable years beginning on or after the final regulations’ publication date. Taxpayers may rely on the proposed regulations until they become final.

Contact
Eddie Adkins
Partner, Washington National Tax Office
+1 202 521 1565

Jeffrey Martin
Senior Manager, Washington National Tax Office
+1 202 521 1526

 
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