Filed under: Court Cases | Tags: Court Cases, Income Tax, Pennsylvania Department of Revenue, Philadelphia, Wage Tax
In general, Pennsylvania does not follow the Internal Revenue Code for Pennsylvania Personal Income Tax (“PIT”) purposes. During the late 1990s, the Pennsylvania Department of Revenue (“Department”) reversed its long standing position and diverged from federal income tax rules, becoming the only state to determine that elective nonqualified deferred compensation was taxable during the year it was earned, not when it was actually received. During 2005, the Pennsylvania legislature amended the PIT statute, thereby reversing the Department’s position. In addition to overruling the Department’s policy, the PIT amendment statutorily reversed a highly publicized Commonwealth Court decision holding that contributions to a nonqualified deferred compensation plan were subject to PIT at the time of deferral and not subject to PIT at the time of distribution. Contrary to the case law and the Department’s policy, the PIT amendment provided that contributions to nonqualified deferred compensation plans were subject to PIT at the time of distribution not at the time of deferral, thus conforming Pennsylvania’s PIT treatment of nonqualified deferred compensation to the federal standard.
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Filed under: Announcements, Court Cases | Tags: FICA, Payroll, Refund, Taxes
I’m not sure if this affects your company and operations, but if so. . . you might be able to obtain a large tax recovery of payroll taxes, plus interest, for your company. Read on:
So many companies had to downsize in the last several years, because of the troubling economy and financial worry.
Did your company pay any severance in 2006? If you paid severance under a plan that covered involuntary terminations resulting from a RIF (reduction in force), plant closing, or similar conditions, then you might wnat to consider filing a protective claim for refund of any social security tax paid for FICA (Federal Insurance Contributions Act) paid on severance amounts.
This fall, the United States Supreme Court will hear the employee benefits case of Conkright v. Frommert, the outcome of which may dramtically impact the way employers handle their retirement plans. The Court will review a decision by the Second Circuit that narrowed the discretion typically allotted to administrators of employee benefit plans.
The main issue the Court will examine is the amount of deference the law should allow plan administrators to have in interpreting plan terms outside of the administrative claims process.
Additionally, the Court will consider the standard appellate courts should follow in reviewing ERISA plan terms interpreted by lower courts.
Plan administrators and benefits practitioners should keep a watchful eye on the outcome of Conkright. If the Court affirms the Second Circuit’s holding, there will be important changes to the process of reviewing claims, the amount of protection granted to plan administrators, as well as a potential transformation of ERISA litigation strategy.
