April, 2017 | RKL LLP
Posted on: April 18th, 2017

Can PA Tax Amnesty Program Benefit You or Your Business?

Can PA Tax Amnesty Program Benefit You or Your Business? Pennsylvania’s budget for Fiscal Year 2016-17 included the chance for delinquent or non-filers to come into state tax compliance through a 60-day amnesty period. Last fall, the Pennsylvania Department of Revenue (DOR) set the official dates and guidelines for the 2017 Tax Amnesty Program, which begins Friday, April 21 and concludes Monday, June 19.

As the start date for the Commonwealth’s 2017 Tax Amnesty Program nears, we rounded up some key questions taxpayers may have about the process and highlight important points to keep in mind.

How will the PA Tax Amnesty Program work?

Starting on April 21, businesses and individuals that have delinquent tax liabilities as of December 31, 2015, may come into compliance with DOR until June 19. Eligible program participants can file back taxes with penalties waived and pay only half of the interest that has accrued over time. This could represent a significant reduction in interest charges for certain taxpayers.

What tax types are eligible for amnesty?

According to program guidelines, all taxes owed to the Commonwealth administered by DOR – whether it is gross receipts, corporate net income or sales and use – are eligible for the Amnesty Program. DOR notes that taxes, interest and penalties collected under the International Fuel Tax Agreement owed to other states or provinces are not eligible for the Amnesty Program. The program fact sheet issued last year by DOR provides a full listing of eligible tax types.

Who can participate?

Business and individual taxpayers that have not paid or underpaid state taxes as of December 31, 2015, are eligible for amnesty during this time period. This also includes taxpayers that recognize an error in reporting or payment on a previously filed return and want to correct it. For taxpayers currently appealing a tax liability, this amount may be included in the 2017 Tax Amnesty Program, but keep in mind that the administrative or judicial appeal will be withdrawn before amnesty is granted by DOR.

Keep in mind, if delinquent or unpaid taxes after December 31, 2015, exist, they must be filed before admittance to the 2017 Amnesty Program is granted, even though these delinquencies are not eligible for the preferential treatment.

Who cannot participate?

Individual and business taxpayers who participated in the previous 2010 tax amnesty program are not eligible to take part in the 2017 program. Taxpayers that are currently under investigation, currently being prosecuted or have been convicted for violating any tax law (local, state or federal) are also excluded from participation. Other exclusions include taxpayers in bankruptcy (unless permission is granted by the Bankruptcy Court) and those with an existing voluntary disclosure agreement with DOR already covering tax liability during the eligibility period.

What happens to eligible taxpayers that do not enroll?

This program is a limited time opportunity created by the General Assembly and offered through DOR with the intent of increasing compliance with and payment of a wide variety of state taxes. At the conclusion of this tax amnesty period, DOR will impose an additional five percent penalty on eligible taxpayers that did not enter the program.

The only situations in which eligible yet nonparticipating taxpayers will be spared the additional DOR penalty are:

  • Currently in bankruptcy protection
  • Have proof of an active deferred payment plan
  • Timely administrative or judicial appeal covers the state tax liability

How can taxpayers apply?

According to the DOR, between April 21 and June 19, 2017, taxpayers must do three things to apply for the program: file an amnesty application, file all necessary returns and pay all back taxes and interest by the close of the amnesty program on June 19.

Need to determine if you are eligible for amnesty? Want to calculate anticipated penalty and interest payments? Seeking assistance to enroll in the program? RKL’s state and local tax team is here to help. Contact me at jskrinak@rklcpa.com or 717.525.7447.


Jason C. Skrinak, CPAContributed by Jason C. Skrinak, CPA, State and Local Taxes (SALT) Practice Leader for RKL’s Tax Services Group. Highly regarded throughout the region for his deep knowledge and expertise in SALT consulting, Jason has significant experience representing taxpayers before Pennsylvania’s Board of Appeals and Board of Finance and Revenue.



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Posted on: April 11th, 2017

Ongoing ERISA Requirements for Employers Offering Retirement Plans

Ongoing ERISA Requirements for Employers Offering Retirement PlansWhether it is a defined benefit plan or a 401(k) account, retirement plans are an important part of the benefits package a company uses to attract and retain top talent. Managing a plan that helps employees save for their future is a significant responsibility, so it is important that employers are compliant with the rules that govern the administration of retirement plans.

The Employee Retirement Income Security Act (ERISA) is a key federal provision outlining the minimum standards a retirement plan must meet. To that end, ERISA assigns certain responsibilities to plan managers and administrators (also known as fiduciaries). Failure to comply with these responsibilities could result in penalties and fines against an employer.

Fiduciary Responsibilities Under ERISA

In the interest of protecting employees and their nest eggs, ERISA outlines a number of requirements for fiduciaries, including:

  • Administering the plan solely in the interest of plan participants and their beneficiaries with the exclusive purpose of providing benefits to them;
  • Acting in a prudent manner;
  • Diversifying plan investments to minimize risk;
  • Following plan documents, which must also be ERISA-compliant;
  • Avoiding conflicts of interest; and
  • Paying only reasonable plan expenses.

Drilling down into these responsibilities, fiduciaries may find that compliance requires expertise in certain areas like investing and financial management. Fiduciaries that do not have such expertise in-house are permitted under ERISA to hire an external party to build and manage a diversified investment portfolio. It is important that all actions taken by the fiduciary related to investment management, record-keeping and use of third-party vendors are well-documented and justified to avoid conflicts of interest and demonstrate ERISA compliance.

The document in which these terms and conditions are contained serves as a foundation for retirement plan operations. In order to adhere to ERISA’s requirement to follow the plan document, employers should regularly review and update as needed to keep it current and compliant.

Ways to Reduce Fiduciary Liability

A thorough and updated plan document is not only a responsibility of fiduciaries, it can also be a strong defense against potential liabilities related to investment losses or imprudent actions. There are other ways employers can reduce personal liability to restore any plan losses, like increasing participant control over investment choices or outsourcing complete or selected fiduciary responsibility.

Most common for 401(k)s or profit-sharing plans, setting up a plan to give the participant more control over their personal investment portfolio will limit the fiduciary’s liability for losses resulting from those decisions. Keep in mind, however, that under this model the fiduciary remains responsible for selecting and monitoring the investment options from which plan participants may choose.

When a fiduciary outsources all or certain functions, it is accountable for the hiring decision and selection of the third-party manager. For example, if a fiduciary selects an investment manager, they are only responsible for that choice, not the investment decisions the manager goes on to make. In this case, the ongoing responsibility of the fiduciary after initial selection would be routine monitoring to ensure that the manager is acting in a prudent manner with regard to the plan’s investments. In addition, fiduciaries must ensure that every person who handles funds or other property of an employee benefit plan is bonded as required under ERISA, unless covered under one of the exemptions.  A fidelity bond is a type of insurance to protect the retirement plan and its participants from losses incurred by dishonest or fraudulent activity of those who handle funds on behalf of the plan.

It is critical that employers understand their fiduciary responsibilities and potential liabilities under ERISA, both to protect themselves from fines and penalties and to preserve the integrity and stability of their company retirement plans. RKL has a team of professionals dedicated to conducting employee benefit plan audits and helping employers maintain compliance and improve plan administration. Contact one of our local offices today for help determining or improving your plan’s ERISA compliance.

Jill E. Gilbert, CPA, CGMA, Partner in RKL's Audit Services GroupContributed by Jill E. Gilbert, CPA, CGMA, Partner in RKL’s Audit Services Group. Jill serves a broad range of industries including governmental agencies and not-for-profit organizations. She also specializes in employee benefit plan audits.




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Posted on: April 4th, 2017

PA ABLE Savings Program Open for Business: What You Need to Know

PA ABLE Savings Program Open for Business: What You Need to KnowPennsylvanians now have a tax-free way to save for the future expenses of loved ones with disabilities or special needs, while preserving the government benefits upon which they rely.

The Pennsylvania Achieving a Better Life Experience (ABLE) Savings Program officially opened for business yesterday, one year after it was unanimously passed by the General Assembly and signed into law by Governor Wolf. Read on to learn how this program, modeled after the federal legislation that authorized states to create their own ABLE plans, allows individuals with disabilities and their families to save for qualified disability-related expenses.

Benefits of a PA ABLE account

The PA ABLE program, which allows families to open and contribute to savings accounts for loved ones who become disabled before age 26, is administered by the Pennsylvania Treasury. Modeled after 529 college savings accounts, the PA ABLE program provides the following tax and federal benefit eligibility advantages:

  • Contribute up to $14,000 each year.
  • Savings grow tax-free.
  • Withdrawals are exempt from federal and state income tax when used for qualified expenses.
  • Accounts are exempt from inheritance tax.
  • Funds in an ABLE account are not counted in eligibility determinations for Supplemental Security Income benefits (savings up to $100,000), Medical Assistance and other means-tested federal programs.

Save Without Jeopardizing Benefits

Previously, additional or supplemental savings would jeopardize or nullify eligibility for much-needed government benefits. This roadblock was a chief complaint of families wanting to help financially support a child with disabilities, and the ABLE savings program was developed at the federal level in response to these concerns.

Pennsylvania’s ABLE program opens a door to financial independence and security previously closed to individuals with disabilities or special needs. It also provides peace of mind for families who can now set aside funds to pay for current and future services including housing, transportation and education.

Other states are in the process of launching their own ABLE programs, some of which accept outside residents. The ABLE National Resource Center tracks the progress of ABLE legislation and programs across the country, and provides a state ABLE program comparison tool.

RKL Wealth Management can help clients set up a PA ABLE account through the state enrollment website. Contact us for assistance or more information.


Lauren R. McNeely, CRPC®, AIF®, of RKL Wealth Management. Contributed by Lauren R. McNeely, CRPC®, AIF®, Wealth Advisor for RKL Wealth Management. Lauren is responsible for managing client relationships in the area of qualified retirement plans. She also specializes in retirement planning, educating plan participants and helping them make informed decisions to strengthen their financial well-being in retirement.



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