In many cases, Employee Benefit plans represent the most valuable asset accumulated during the marriage. Dividing these funds in the event of a divorce can be a complex process and often have serious tax implications. The GOP proposed tax legislation the “Tax Cuts and Jobs Act” affects Employee Benefits in a significant way.
While it remains speculative to talk about legislation at this early stage, as follow up to our blog published November 6, 2017(1), it is important to understand just how Employee Benefits could be affected under this new proposal. Whether you are happily married or contemplating divorce, it is in the best interest of all married individuals to have an awareness of the employee benefit plans that they or their spouse may be entitled to through their employer, as well as how this impending legislation may affect those benefits.
Qualified Retirement Plans
While there was much speculation that pre-tax employee contributions would be affected by the legislation, employer contribution guidelines under the proposed legislation have remained intact. Other significant changes for retirement plans that were proposed include the following:
Changes to the Taxation of Nonqualified Deferred Compensation
Health and Welfare Plans; Fringe Benefits
Again, this legislation is likely to evolve in the coming weeks. With the House’s goal of passing legislation before Thanksgiving, expect those proposed changes to come quickly. We will continue to update those developments, so be sure to check back.