Tax News
Post details: Release of 2008 Pension Plan Limitations Is Imminent, IRS Official Says
10/18/07
Release of 2008 Pension Plan Limitations Is Imminent, IRS Official Says
CCH (cch.taxgroup.com) reports:
Cost-of-living adjustments (COLAs) for pension plans for the 2008 tax year are expected to be released on October 18 or 19, an IRS Employee Plans (EP) official predicted on October 17. The release is slightly delayed because the Service is consolidating all of the pension information into one release, Martin L. Pippins, a technical guidance expert with EP, told the Society of Actuaries Annual Meeting in Washington, D.C.
Dollar Limitations
Contributions and benefits for qualified retirement plans are subject to dollar limitations under Code Sec. 415. The IRS annually publishes cost-of-living adjustments applicable to pension plans and other items for the following year. These limitations affect how much a defined benefit plan may pay a participant each year and how much a participant may contribute to a defined contribution plan each year.
User-Friendly Approach
On October 17, the Social Security Administration released the 2008 inflation-adjusted wage base for determining the maximum amount of earnings subject to Social Security tax (TAXDAY, 2007/10/18, M.1). Many observers anticipated that the 2008 IRS pension COLAs would be released the same day.
Publication of the 2008 pension COLAs was delayed because the IRS is making the presentation of the material more "user friendly," Pippins said. He briefly highlighted some of the provisions that generate the most questions from taxpayers and practitioners. These include limitations impacting Roth IRAs and the Saver's Credit.
By George L. Yaksick, Jr., CCH News Staff
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