1. SECURE ACT SETTING EVERY COMMUNITY UP FOR RETIREMENT EHNANCEMENT ACT
PASSED HOUSE LAST THURSDAY
EXPECTED TO PASS SENATE

2. Increase Small Employer Access to Retirement Plans
Will try to expand small employers’ capability to offer some form of retirement savings to employees by allowing small employers to come together to set up and offer 401(k) plans with less fiduciary liability concern and less cost than what exists today.

3. Increase Annuity Options Inside Retirement Plans
Update the safe harbor provision for plan sponsors to select annuity providers in order to offer in-plan annuities inside of a 401(k) by easing the liability concern

4. Increase Required Minimum Distribution Ages
Today the law requires that most individuals take out required minimum distributions (RMDs) from their retirement accounts once you reach age 70.5.
The SECURE Act would delay this requirement to age 72. 

5. Removal of Age Limitation on IRA Contributions
For years there has been a rule that essentially discouraged retirement savings in IRAs for people who continued to work later in life. After age 70.5, you could no longer contribute to an IRA, but you could still contribute to a Roth IRA. 
SECURE Act would remove this savings limitation by repealing the age limitation for traditional IRA contributions.

6. Tax Credit for Automatic Enrollment
Tax credit of $500 to help some smaller employers encourage automatic enrollment into their retirement plan
This small credit could help offset some of the costs of operating a plan at the beginning. Automatic enrollment has seen great success in increasing plan participation by employees.

7. Penalty-Free Distributions for Birth of Child or Adoption
Allow an aggregate amount of $5,000 to be distributed from a retirement plan without the 10 percent penalty in the event of a qualified birth or adoption.
The distribution would need to occur within one year of the adoption becoming final or the child being born.

8. Lifetime Income Disclosure for Defined Contribution Plans
The bill would require that defined contributions plans deliver a lifetime income disclosure to participants at least once every 12 months. This lifetime income disclosure would essentially show how much income the lump sum balance in the retirement account could generate.
The methodology for calculating lifetime income is still in the works. Additional disclosures and information on assumptions used would also have to be provided to participants.

9. Removal of “Stretch” Inherited IRA Provisions
In the past, beneficiaries of retirement accounts could typically spread the distributions over their own life expectancy if the owner had not reached RMD age
What is viewed as a tax-generating provision that would require most beneficiaries to distribute the account over a 10-year period. This change would accelerate the depletion of inherited accounts for many large IRAs and retirement plans.
The potential tax burdens of faster distributions of inherited retirement accounts will increase the need for proper estate planning and potentially more strategic Roth conversions during the life of the account owner, adding additional complexity to retirement and estate planning.

10. WAGE WITHHOLDING 2018 AND FORWARD
All new 2018 Wage Withholding Tables (Revised January 2018) to reflect the Tax Cut and Jobs Act (TCJA)
Employers started using 02/15/18
Employees need not change their W-4 – UNLESS…….

11. ……YOU ARE IN A KEY GROUP……
Two-income family
Work two or more jobs
Only work for part of the year
Have children and claim credits such as child tax credit
Have older dependents, including children age 17 and older

12. Results….. Same income – lower withholding – less refund or owed tax
withholding-calculator

13. Consequences…. Underpayment Interest rates: 04/01/2016 – 03/31/2018 4%
04/01/2016 – 03/31/ %
04/01/2018 – 12/31/2018 5%
01/01/2019 – 03/31/2019 6%
CONGRESS REACTED 01/16/2019 Penalty will be waived ONLY if total withholding and estimated tax payments = or is > 80% of 2018 tax by 01/15/2019
The amount you'll be fined is based on how much you owe and how long you've owed it. The typical penalty is 0.5 percent of the total amount you owe calculated for each month you haven't paid it 

14. WOTC WORK OPPORTUNITY TAX CREDIT
Unemployed Veterans $9,600
Qualified Long-Term Unemployed $2,400
SNAP (food stamps) Recipient $2,400
Short-Term TANF Recipient $2,400
Long-Term TANF Recipient $9,000
Designated Community Resident $2,400
Vocational Rehabilitation $2,400
Ex-Felon $2,400
SSI Recipients $2,400

15. How to Claim WOTC Pre-screening and Certification
An employer must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. An eligible employer must file Form 8850, Pre- Screening Notice and Certification Request for the Work Opportunity Credit, with their respective state workforce agency within 28 days after the eligible worker begins work.
Employers should contact their individual state workforce agency with any specific processing questions for Forms 8850.

16. FORM 8850

17. Limitations and Claiming the Credits
The credit is limited to the amount of the business income tax liability or social security tax owed.
After the required certification (Form 8850) is secured, tax-exempt employers claim the credit against the employer social security tax by separately filing Form 5884-C, Work Opportunity Credit for Qualified Tax- Exempt Organizations Hiring Qualified Veterans.
File Form 5884-C after filing the related employment tax return for the period that the credit is claimed. The IRS recommends that qualified tax- exempt employers do not reduce their required deposits in anticipation of any credit. The credit will not affect the employer’s Social Security tax liability reported on the organization’s employment tax return.

18. NON-PROFITS - UBTI PARKING??????
General Rule - Operating a parking lot or parking garage that is open to the public generally results in unrelated business income (UBI) unless the activity satisfies one of the exemptions from UBI.
Substantially Related to Exempt Purpose
Parking Operations Can Be Charitable Activity
“Not Regularly Carried On” Exemption
Convenience Exemption
Rental of Real Property Exemption
Volunteer Services Exemption
Third-party Operators

19. TURNING AN EXPENSE INTO INCOME??
Effective for amounts paid or incurred after December 31, 2017, the 2017 Tax Cuts and Jobs Act (TCJA) provides that certain transportation fringe benefits are taxed as unrelated business taxable income (UBTI).
As a result, organizations with transportation fringe benefits totaling $1,000 or more that are not directly connected to an unrelated trade or business must file Form 990-T (Exempt Organization Business Income Tax Return).
Qualified transportation fringe benefits that are directly connected with an unrelated trade or business regularly carried on by the organization are no longer deductible when calculating UBTI, but do not need to be included in the computation of UBTI. In other words, organizations that were deducting such costs can no longer deduct them, and organizations that were not deducting them must now include them in UBTI. These benefits include –
commuter transportation between the employee's home and place of employment in a commuter vehicle (including van pools);
transit passes;
qualified parking (including any parking facility used in connection with providing qualified parking); and
qualified bicycle commuting reimbursement.

20. Example if paying for parking -
Help Me Please (HMP) is a section 501(c)(3) organization with 10 employees. HMP pays a third party for parking. The cost is $200 per employee per month, or $24,000 annually for all 10 employees ($200 × 12 months × 10 employees). The entire $24,000 is disallowed. Assuming HMP does not have any unrelated trades or businesses, it must include $24,000 in UBTI on Form 990-T.

21. Factors if Owned Parking Lot/Facility….
Step 1 Calculate the disallowance for reserved employee parking spaces. The ratio of reserved employee parking spaces to total parking spaces is multiplied by the total parking expenses to determine the disallowed portion of parking facility costs. Reserved employee parking spaces are designated exclusively for employee use and can be identified by a sign or segregated by a barrier limiting access to employees.
Step 2 Determine the primary use of the remaining parking spaces. If the primary use of the remaining parking spaces is to provide parking to the general public (e.g., not employees or independent contractors of the organization), the expenses related to this primary use are not disallowed or required to be added to UBTI.
Primary use means more than 50% of actual or estimated use during an organization's normal hours on a typical day. Nonreserved spaces that are available but not used by the public are treated as public use.
Step 3 Calculate the allowance for parking spaces reserved for nonemployees. If the primary use of the parking facility is not to provide parking to the public, a ratio of reserved spaces for nonemployees to the total remaining parking spaces available must be made. That product is multiplied by the remaining parking facility costs. These expenses for public use are not disallowed or required to be added to UBTI.
Step 4 Determine the remaining use of the parking spaces and allocate expenses.

22. Example if Owned Parking Lot/Facility
125 TOTAL SPACES
35 EMPLOYEE DESIGNATED SPACES
90 PUBLIC SPACES
TOTAL PARKING LOT COSTS $18,000
35/125 = 28% OF $18,000 IS AMOUNT IN QUESTION, OR $5,040
IF EO HAS UNRELATED BUSINESS INCOME $250,000 AND EXEMPT REVENUE OF $450,000, THE $5,040 IS FURTHER ALLOCATED BETWEEN THE 2 FUNCTIONS.
450/700 = 65% UBTI, OR $5,050 X 65% = $3,276
250/700 = 35% NON-DEDUCTIBLE COSTS TO UNRELATED BUSINESS INCOME $5,050 X 35% = $1,764