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DOL Amends Method for Plan Fiduciaries to Report Noncompliant Service Providers

Under the new ERISA 408(b)(2) service provider fee disclosure regulations, responsible plan fiduciaries must file notices with the Department of Labor (DOL) to obtain relief from ERISA’s prohibited transaction provisions which may apply if a service provider fails to disclose information in accordance with the regulation’s requirements. On July 13, 2012, the DOL revised the mailing address and web-based submission process for filing such notices. Under the new rule, notices may be submitted electronically through a dedicated link on the DOL’s website, or by mail to a PO Box dedicated for such notices. A copy of the final rule can be found here.

IRS Issues Guidance Regarding Medicare Tax Effective January 1, 2013

Effective January 1, 2013, employers must withhold an additional Medicare tax of 0.9% from the wages of employees who earn $200,000 or more. The IRS issued Frequently Asked Questions (FAQs) to help employers implement this new tax. The FAQs state that the employer must withhold the additional tax beginning with the pay period in which it pays wages in excess of $200,000 to an employee. The tax applies only to the wages over the $200,000 threshold. There is no requirement to notify employees once the employer begins withholding the additional tax and there is no employer contribution required with respect to the tax. The IRS plans to release revised Forms 941, 943 and the tax return schemas for the Form 94X series of returns. The IRS’ FAQs can be found here.

July 2012