Reduction Agreement Definition

11 avril 2021 par  
Classé dans Non classé

The term « salary reduction agreement » is not used only in Section 3121 (a) (5) (D); but also in another subsection of Section 3121, including Section 3121 (v) (1) (1) (B), which provides that wages include « any amount that is considered a contribution by the employer within the meaning of Section 414 (h) (2) when the collection is carried out in this section in accordance with a wage reduction agreement (whether by a written instrument or otherwise proven). Commentators argued that for sections 3121 (a) (a) (5) (D) and 3121 (v) (1) (B), the concept of a « salary reduction agreement » could be interpreted differently, Section 3121 (v) (1) (1) (B) applies only to contributions to reduce wages collected under a withdrawal plan drawn up by a state or local government employer section 414 (h). By definition, the wage reductions that these employer contributions fund are mandatory, while pension contributions in section 403 (b) of pension plans may be mandatory or optional. While it is true that salary reductions related to storage plans are mandatory under Section 414 (h), we do not see in the statutes or legislative history evidence that Congress intended to interpret the same language differently or to treat workers of the same level differently for FICA purposes. Section 3121(a) (5) (D) and Section 3121 (v) (1) (B) include contributions to reduce wages for FICA tax purposes. Neither the law nor legislative history serves as the basis for the conclusion that mandatory salary reductions under a Section 414 (h) withdrawal plan should be included in fiCA salaries, while mandatory salary reductions related to a section 403 (b) pension plan should be excluded from wages. As a result, the Department of Finance and the IRS continue to believe that a uniform interpretation of the identical language should be given in two subsections of the same language, which was adopted only one year apart. As a result, the final regulation adopts the definition of the wage reduction agreement, as proposed. Commentators have argued that Congress intends that the term « salary reduction agreement » in Section 3121 (5) (D) would apply only to voluntary wage reductions and not to wage reductions that are necessary as a condition of employment. To support this view, commentators referred to the history of the legislation underlying Section 3121(a) (a) (D), particularly the following language of the Senate report: the IRS also proposes a contributory wage reduction plan, called the SARSEP or the simplified pension scheme for wage reduction.

Rendez-vous sur Hellocoton !

Les commentaires sont désactivés pour cet article.