Rev. Ruling 2005-55: minimum vesting standards.
Does a profit-sharing plan Profit-Sharing Plan A plan that gives employees a share in the profits of the company. Each employee receives into an account, a percentage of those profits based on their earnings. Also known as "deferred profit-sharing plan" or "DPSP".
Notes: This is a great way to give employees a sense of ownership in the company. The company decides what portion of the profit will be shared. fail to satisfy the requirements of IRC Sec. 401(a)(7) if it provides a medical reimbursement account for each participant from which payments may only be distributed to reimburse the participant for expenses for medical care?
According to Rev. Ruling 2005-55, medical reimbursement accounts can't make distributions of medical expenses unless they are made on a taxable basis.
For more, visit www.irs.gov/pub/irs-drop/rr-05 55.pdf.
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