The Treasury Division and Inner Income Service stated Monday that 403(b) retirement plans — utilized by sure public colleges, church buildings and charities — can apply for a similar tax-favored remedy as certified retirement plans like 401(ok)s and use the identical regulatory course of as these plans beginning in June 2023.
In Income Process 2022-40, the IRS particulars the growth of the dedication letter program, which is the method by means of which several types of plans can get IRS approval for tax-favored remedy. The IRS doc additionally spells out different modifications affecting individually designed retirement plans.
The IRS states that Income Process 2022-40 comprises two key additions for 403(b) retirement plans.
First, it expands the method for preliminary plan dedication: “Starting June 1, 2023, 403(b) retirement plan sponsors might submit dedication letter functions for all preliminary individually designed retirement plans based mostly on the sponsor’s Employer Identification Numbers.” (The IRS says extra particulars on the growth could be present in Part 12 of Income Process 2022-40.)