Internal Revenue Service July 7, 2014 – Federal Register Recent Federal Regulation Documents

This document contains corrections to final regulations (TD 9665) that were published in the Federal Register on Monday, May 12, 2014 (79 FR 26838) clarifying the rules regarding the tax treatment of payments by qualified retirement plans for accident or health insurance. The final regulations set forth the general rule under section 402(a) that amounts held in a qualified plan that are used to pay accident or health insurance premiums are taxable distributions unless described in certain statutory exemptions. The final regulations do not extend this result to arrangements under which amounts are used to pay premiums for disability insurance that replaces retirement plan contributions in the event of a participant's disability. These regulations affect sponsors, administrators, participants, and beneficiaries of qualified retirement plans.