The IRS released proposed regulations (REG-131643-15) that would amend the definitions of qualified matching contributions (QMACs) and qualified nonelective contributions (QNECs) under regulations relating to certain qualified retirement plans that contain cash or deferred arrangements under Section 401(k) or that provide for matching contributions or employee contributions under Section 401(m).
Under these proposed regulations, employer contributions to a plan would be able to qualify as QMACs or QNECs if they satisfy applicable nonforfeitability and distribution requirements at the time they are allocated to participants' accounts. However, they need not meet these requirements when they are contributed to the plan. These regulations would affect participants in, beneficiaries of, employers maintaining and administrators of tax-qualified plans that contain cash or deferred arrangements or that provide for matching contributions or employee contributions.
The proposed regulations would apply to taxable years beginning
on or after the final regulations' publication date. Taxpayers
may rely on the proposed regulations until they become final.
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