Are you in Compliance? Tax Requirements for Your Company’s Health & Welfare Plans

Posted on:  August 7th, 2014
By:  Diane Morrison

Providing a retirement plan or health benefits for your employees is one of those perks that can help a small business owner  attract and keep the most talented employees.  But did you know that there are filing requirements for many health and welfare plans?  In general, a plan with fewer than 100 participants is considered by the IRS to be a “small plan”, and if your small plan is partially or fully funded by employee contributions, then you are most likely required to file a Form 5500 return each year.
The rules under the tax code are very complex, with some situations not requiring the 5500 filing.  This includes some cafeteria plans, “unfunded plans”, SIMPLE IRAs, and SEP IRAs.  In other words, don’t take this on alone.  Contact us for advice in evaluating your plan’s facts and circumstances or for guidance in setting up your new plan.
In addition, the IRS has announced a one-year pilot program beginning in June 2014 offering relief to small businesses who owe penalties for unknowingly not filing a 5500 return.  This program is only available to retirement plans maintained by certain partnerships or owner-spouse arrangements – again, consult us to see if you are eligible.  Tax compliance for health and welfare plans is important, but don’t let the perceived complexities keep you from diving in, even if your business is very small.  Working in partnership with us can help you create a sound financial future for you, your company and your employees.

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