IRS Releases Q&A on Changes to SECURE 2.0 Act of 2022; Comments Due February 20

The Internal Revenue Service (IRS) published Notice 2024-2 with guidance in the form of Q&As to assist in the implementation of the provisions of the SECURE 2.0 Act of 2022. The notice is not intended to provide comprehensive guidance. The Department of the Treasury (Treasury) and the IRS continue to analyze the various provisions of the SECURE 2.0 Act and anticipate issuing further guidance, including regulations, as appropriate.

Specifically, this notice addresses issues under the following sections of the SECURE 2.0 Act:

• section 101 (expanding automatic enrollment in retirement plans),
• section 102 (modification of credit for small employer pension plan startup costs),
• section 112 (military spouse retirement plan eligibility credit for small employers),
• section 113 (small immediate financial incentives for contributing to a plan),
• section 117 (contribution limit for SIMPLE plans),
• section 326 (exception to the additional tax on early distributions from qualified plans for individuals with a terminal illness),
• section 332 (employers allowed to replace SIMPLE retirement accounts with safe harbor 401(k) plans during a year),
• section 348 (cash balance),
• section 350 (safe harbor for correction of employee elective deferral failures),
• section 501 (provisions relating to plan amendments),
• section 601 (SIMPLE and SEP Roth IRAs), and
  
• section 604 (optional treatment of employer contributions or nonelective contributions as Roth contributions).

The Treasury Department and the IRS request comments on all sections from this notice, and specifically on:

• Section 113 of the SECURE 2.0 Act with respect to a de minimis financial incentive that is provided by a party other than the employer; and
• Section 348 of the SECURE 2.0 Act with respect to whether there are situations under which a plan with a statutory hybrid benefit formula within the meaning of § 1.411(a)(13)-1(d)(4) that is not described in Q&A H-2 of 80 this notice would be amended pursuant to section 348 of the SECURE 2.0 Act, as described in section II.H of this notice.

Comments are requested by February 20, 2024.