Tightened exemption from welfare benefit fund deduction limit - IRS News - Brief Article

California CPA, Oct, 2002 by Stuart R. Josephs

The IRS has proposed regulations (REG-165868-01) that would substantially expand the experience rating definition for 10-or-more employer welfare benefit plans and generally narrow the qualifications for such plans. This would expose more of these plans to the deduction limits that Secs. 419 and 419A impose on welfare benefit funds that typically provide bundled benefits such as life and health insurance, severance benefits and child care.

The proposed effective date is for contributions paid or incurred in employer tax years beginning after July 10, 2002.