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Topic: EGTRRA

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	2005 Budget Options (Site not responding. Last check: 2007-10-16)
		EGTRRA sets the amount of the exemption under the estate tax at $1.5 million for 2005, with scheduled increases to $2 million in 2006 and $3.5 million in 2009.
		EGTRRA has substantially reduced the number of estates that are subject to the estate tax compared with the number affected under earlier law.
		Estate planning under EGTRRA has become significantly more complicated: people now face not only the traditional uncertainty about when they will die and what the ultimate size of their estate will be but also the complexity of legislated phaseouts and repeals and the ultimate reinstatement of the estate and gift tax.
	www.cbo.gov /bo2005/bo2005_showhit1.cfm?index=REV-41 (1402 words)

	HRS - Benefits - New Tax Laws (EGTRRA) (Site not responding. Last check: 2007-10-16)
		EGTRRA includes provisions that reduced individual income tax rates and provided opportunities for all employees to increase their retirement savings contributions.
		EGTRRA does effect supplemental retirement plans that allow University employees to tax-shelter additional income for retirement by increasing contribution limits and creating tax incentives.
		EGTRRA also preserved the Service Catch-up provision that allows employees with 15 or more years of University service to contribute up to an additional $3,000 per year, with a lifetime maximum contribution of $15,000.
	www.utexas.edu /hr/irg/newtax.html (556 words)

	Estate Planning Under EGTRRA
		EGTRRA, as currently written, phases in repeal of the estate tax over nine years, until January 1, 2010, when the tax is repealed.
		EGTRRA set the gift tax exemption amount at $1 million, where it remains even after the estate tax is repealed in 2010.
		EGTRRA also does not change the unlimited charitable deduction that allows individuals to transfer free of tax an unlimited amount of property, during life and/or at death, to charitable organizations.
	www.tdbanknorth.com /assetmgmt/articles/expert_7.html (1527 words)

	The Bush Tax Cut: One Year Later (Site not responding. Last check: 2007-10-16)
		EGTRRA cuts the highest income tax rates: the 28, 31, and 36 percent rates fall by 3 percentage points, while the 39.6 percent rate falls to 35 percent.
		EGTRRA, in contrast, raises after-tax income by 6.3 percent for households in the top 1 percent of the income distribution, compared to 2.8 percent or less for other groups, and less than 1 percent for the bottom quintile (see table 1).
		EGTRRA, combined with the economic slowdown, has wreaked havoc on any notion of budget discipline and has led to abandonment of the previous consensus budget goal of preserving the Social Security surplus, that is, of balancing the non-Social Security budget.
	www.brookings.edu /comm/policybriefs/pb101.htm (2852 words)

	Important Changes to Tax-Qualified Retirement Plans
		EGTRRA provided that distributions made after December 31, 2001 from qualified Section 401(a) plans, Section 403(b) plans, and Section 457 plans (except Section 457 plans for tax-exempt employers) may be rolled over to any of those plans or an IRA.
		EGTRRA directed the IRS to reduce the required suspension period that applies to elective deferrals of employees who obtain a hardship distribution of Section 401(k) or Section 403(b) elective deferrals from 12 months to 6 months.
		Prior to EGTRRA's enactment, distributions were allowed from Section 401(k) plans after a "separation from service." However, under the so-called "same desk" rule, the IRS took the position that a separation from service may not have occurred if an employee transferred employment to a successor employer, but continued to work at the same job.
	www.ffhsj.com /cmemos/030402_tax_qual_ret.htm (1446 words)

	CCH, a Wolters Kluwer business
		EGTRRA increased the statutory limit on elective deferrals to $11,000 in 2002, with increases in $1,000 annual increments until the limit reaches $15,000 in 2006.
		Prior to the enactment of EGTRRA, the limit on the annual additions to a defined contribution plan was set at the lesser of 25 percent of compensation or $35,000.
		EGTRRA increased the profit-sharing plan deduction limit to 25 percent of compensation and allowed employers to maximize deductible contributions under a stand-alone profit-sharing plan.
	www.cch.com /wbot2004/019OnePerson401ks.asp (2210 words)

	W&D \| Publications \| Client Alerts \| Reminder — New Retirement Plan Rules
		EGTRRA also permits additional pre-tax "catch-up contributions" to be made to 401(k), 403(b) and (subject to certain limits) governmental 457 plans by those participants who will have attained at least age 50 by the end of the applicable year.
		For not-for-profit employers, EGTRRA now permits significant additional contributions to be made to a 457(b) plan for a "top hat" group of key employees ($11,000 for 2002), on top of the increased contributions that can be made to the institution’s 403(b) or 401(k) plan.
		With the EGTRRA change, employers may want to allow employees to contribute 50% or more of their pay to a plan, on a non-matched basis (subject to the rule that pre-tax contributions must still be limited to $11,000 annually, as adjusted as described above).
	www.wiggin.com /pubs/alerts_template.asp?ID=1514574132002 (1643 words)

	Notice 2001-57
		Second, a plan is required to have a good faith EGTRRA plan amendment in effect for a year if the plan sponsor elects to implement a provision of EGTRRA for the year and the plan language, prior to the amendment, is not consistent with the operation of the plan in a manner consistent with EGTRRA.
		Although good faith EGTRRA plan amendments are generally not required to be adopted earlier than the end of the plan year in which the amendments are required to be, or are optionally, put into effect, earlier adoption may be necessary in order to avoid a decrease or elimination of benefits protected by § 411(d)(6).
		Section 654(b) of EGTRRA changed the § 415 aggregation rules to provide that, for limitation years beginning after December 31, 2001, a multiemployer plan is not combined or aggregated with a non-multiemployer plan for purposes of applying the § 415(b)(1)(B) compensation limit to the non-multiemployer plan.
	benefitslink.com /IRS/notice2001-57.html (7196 words)

	IRS Issues Proposed Regulations for Notice of Plan Amendments Significantly Reducing Benefit Accruals Update On EGTRRA ...
		In addition, EGTRRA amended § 204(h) to provide that a plan amendment that eliminates or significantly reduces an early retirement benefit or retirement-type subsidy shall be treated as a significant reduction in the rate of future benefit accruals.
		Employees residing in nonconforming states could be subject to state income taxation on any 401(k), 403(b) or 457 plan salary-deferral contributions in excess of the salary-deferral limitation in effect in 2001, including the special catch-up contribution, and might have to recognize state taxable income on rollovers between qualified retirement plans and 403(b) or 457 plans.
		In addition, plan participants and sponsors in states that do not conform to the EGTRRA provisions modifying federal tax laws governing retirement plans need to consider the state income tax impact and the increased record keeping and administrative burdens before adopting or taking advantage of increased contribution levels and rollover options in their 401(k) plans.
	www.ebglaw.com /article_690.html (1505 words)

	SunGard Corbel : News : Pension Technical Updates
		Most plans will need to be amended for EGTRRA no later than the end of the 2002 plan year, or if later, by the end of the GUST remedial amendment period.
		This is because some changes made by EGTRRA, if made to a plan on a retroactive basis, could result in a violation of the IRC §411(d)(6) anti-cut back rules.
		Thus, the EGTRRA amendment dealing with the top-heavy changes could be made prior to the last day of the 2002 plan year without violating the anti-cut back rules.
	www.relius.net /News/technicalupdates.asp?ID=141 (808 words)

	Estate Tax Changes
		In addition, EGTRRA provides that the amount of state death tax credit that may be taken against the federal estate tax is reduced by 25 percent for deaths occurring in 2002, 50 percent for deaths in 2003, 75 percent for deaths in 2004 and by 100 percent for deaths occurring in 2005 and thereafter.
		Prior to the enactment of EGTRRA in 2001, 37 states and D.C. relied solely on a "pick-up tax" in which the state death tax was simply an amount equal to the maximum amount of state death tax credit allowed under federal law.
		North Carolina updated their reference date to conform to the federal estate tax (including increased exemptions) as of May 7, 2001, but provided (for deaths occurring prior to January 1, 2004) that the amount of the state pick-up tax is to be computed without regard to the phase-out of the credit contained in federal law.
	www.taxadmin.org /fta/rate/Estatetax.html (2106 words)

	Administration of EGTRRA's Pension and Retirement Provisions
		The federal Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), signed by President Bush on June 7, 2001, made numerous changes to the pension and retirement provisions of the Internal Revenue Code.
		EGTRRA changed federal law on these matters, but it did not change North Carolina law.
		The dilemma posed by the lack of alignment in the EGTRRA retirement and pension provisions is substantial.
	www.dor.state.nc.us /practitioner/egttra_pension.html (763 words)

	Hewitt Associates - Washington Status Reports - Impact of EGTRRA on Employer Plans (Site not responding. Last check: 2007-10-16)
		EGTRRA provides expanded tax relief for individuals to pay for college for themselves and their children.
		EGTRRA includes a new employer tax credit of 25% of the expenses for providing employee child care facilities or contracting with a qualified child care provider to provide child care for employees' children, and a 10% tax credit for expenses to provide resource and referral information for employee child care needs.
		For not-for-profit employers, the overall effect of the EGTRRA changes is to greatly reduce the differences between 401(k) and 403(b)/457 plans.
	was4.hewitt.com /hewitt/resource/wsr/2001/egtrra.htm (1029 words)

	AGG > Publication > Updating Your Retirement Plans: "GUST" and "EGTRRA" Filing and Amendment ...
		Increased Annual Additions Limit - EGTRRA raised the maximum annual amount of an employee's permitted contributions to all qualified defined contribution retirement plans to the lesser of 100% of an employee's compensation or $40,000 (formerly, an employee's maximum annual addition was the lesser of 25% of the employee's compensation or $35,000).
		EGTRRA provides that an employer may ignore amounts attributable to rollovers from other qualified retirement plans in determining whether an employee's plan account exceeds the $5,000 cash-out threshold.
		EGTRRA liberalized these rules and permits rollovers among various types of plans and also permits after-tax contributions to be rolled over in certain circumstances.
	www.agg.com /contents/PublicationDetail.aspx?ID=737 (760 words)

	OPED18 EGTRRA - Whither the surplus?
		EGTRRA - the Economic Growth and Tax Relief Reconciliation Act of 2001 passed the Congress and was signed into law June 7th 2001.
		EGTRRA reduced marginal tax rates - in 2001 the lowest rate of 15 percent was partially replaced by a 10 percent bracket.
		Thus, approximately half of the (projected) change is due to EGTRRA, approximately 20 percent is due to the recession, approximately 21 percent is due to increased spending due to the terrorist attacks, and the rest by increased spending unrelated to the attacks.
	www.sibelle.info /oped18.htm (790 words)

	TRI Pension Services/ Archives of Old "What's New" Summaries (July 1 through December 31, 2001)
		The effective date of each EGTRRA provision adopted must be the date as of which the provision must apply to the plan or, in the case of an optional provision, as of the date the plan began operating in accordance with that provision.
		Since most of the EGTRRA amendments are effective in 2002, in most cases the related good faith amendment will need to be adopted on or before the end of the GUST remedial amendment period or the end of the 2002 plan year, whichever ends later.
		This helps defined contribution plans with respect to the EGTRRA changes to the top heavy rules because the top heavy minimum contribution in a defined contribution plan is usually limited to those non-key employees who are still employed at the end of the plan year, pursuant to §1.416-1, M-10, of the regulations.
	www.cyberisa.com /erisa_old_07to12_2001.htm (14857 words)

	U.S. Chamber of Commerce - Employer Based Retirement Plan Community Urges Enactment of EGTRRA Permanency
		Many critical retirement savings provisions in EGTRRA will expire at the end of 2010 or earlier unless they are made permanent.
		Title Six of EGTRRA contains numerous improvements to the employer provided retirement plan system that permit American workers to save more in employer plans and to receive higher benefits in retirement.
		If Title Six of EGTRRA is allowed to sunset, these improvements will be rolled back or eliminated; a key component of the successful ownership society will be restricted; and the retirement security of millions of individuals will be diminished.
	www.uschamber.com /issues/index/retirementpension/joint_egtrra_permanency_letter.htm (381 words)

	EGTRRA: Which Provisions Spell the Most Relief?
		EGTRRA then "sunsets" on December 31, 2010, restoring the law to its pre-2001 status.
		Under EGTRRA, the credit is refundable for up to 10 percent of earnings over $10,000 (upped to 15 percent in 2005).
		Although many lawmakers would like to make EGTRRA's provisions permanent, the reemergence of budget deficits and the high costs of extending many EGTRRA provisions raises the possibility that at least some of the tax cuts might be scaled back, or eliminated, by 2011.
	www.urban.org /url.cfm?ID=310510&renderforprint=1&CFID=6023124&CFTOKEN=36435582 (4191 words)

	Whither Pensions? A Brief Analysis of Portman-Cardin III (Site not responding. Last check: 2007-10-16)
		Specifically, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) substantially raised the annual contribution limits on IRAs and 401(k) plans, increased the maximum benefit payable under defined benefit plans, and increased the maximum amount of compensation that could be considered in determining pension benefits.
		EGTRRA also provided a savers' credit aimed at moderate income households, modeled after a provision that had been introduced in Senate pension legislation.
		As with other EGTRRA rules, the saving-related provisions are phased-in over time and then sunset—the savers' credit in 2006 and the other provisions by 2010.
	www.brook.edu /views/articles/gale/20030428.htm (306 words)

	CUPA-HR News Online \| EGTRRA’s Tax Changes Call for Review of Deferred Compensation Arrangements Offered to ...
		In light of the EGTRRA changes, now is the time for chief HR officers, executives, and compensation committees of trustee boards to reexamine deferred compensation arrangements.
		In addition to increasing that limit from $35,000 to $40,000, EGTRRA increased the amount of compensation used to calculate the annual contribution limit to $200,000.
		Although EGTRRA does not change the status of Section 83 option plans, college and university executives participating in those plans should consider how much they wish to contribute to the plans in light of their desire for certainty with respect to how the contributions will be taxed.
	www.cupahr.org /newsroom/cupahrnews_archives/vol01-8-02/egtrra.html (1019 words)

	Knox McLaughlin Gornall & Sennett
		EGTRRA adds financial incentives for the adoption and maintenance of retirement plans with provisions that are generally effective for plan years beginning January 1, 2002.
		The catch-up election is not subject to the deferral limitation, the deduction limitation or the Section 415 annual addition limitation that would otherwise apply to the employer or to the participant.
		EGTRRA narrows the definition of key employees, simplifies the determination of whether a plan is top-heavy for a particular year, expands the type of contributions that will satisfy the top-heavy minimum contribution and exempts certain safe harbor 401(k) plans from the top-heavy rules.
	www.kmgslaw.com /articles/retirement_plan.asp (1054 words)

	U.S. Chamber of Commerce - egtrra
		Most provisions were effective for tax years beginning in 2002, however, almost all of the provisions are set to expire on December 31, 2010.
		EGTRRA also removes the 25% compensation cap for an individual employee.
		EGTRRA allows employees to roll-over retirement savings between 401(k), 403(b), and state and local 457 arrangements.
	www.uschamber.com /about/committees/egtrra.htm (403 words)

	Announcement 2001-42
		EGTRRA does not provide relief from the requirements of § 411(d)(6) for plan amendments adopted as a result of EGTRRA changes in the plan qualification requirements.
		Plans amended by adoption of the sample EGTRRA amendments may have to be amended again within the EGTRRA remedial amendment period to continue to satisfy the plan qualification requirements as amended by EGTRRA.
		MandP sponsors and volume submitter practitioners may amend pre-approved plans for EGTRRA through the adoption of a separate, clearly identified addendum to the plan (or basic plan document) and/or adoption agreement that is limited to the provisions of EGTRRA.
	www.aspa.org /archivepages/gac/2001/2001-42.htm (2196 words)

	Federal Estate and Gift Tax and GST
		EGTRRA has a significant effect on the federal estate, gift, and generation skipping transfer taxes, as well as on other taxes.
		Additionally, under EGTRRA the estate tax and GST tax (but not the gift tax) will be repealed in 2010.
		EGTRRA will gradually increase the applicable exclusion amount for estates to $3,500,000 between 2004 and 2009, as shown below.
	home.earthlink.net /~dwmoltzen/estgftax.html (720 words)

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