This Week's Internal Revenue Bulletin

HIGHLIGHTS OF THIS ISSUE

These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations.

EMPLOYEE PLANS

Notice 2021-48, page 305. This notice provides guidance on the changes to the funding rules for single-employer defined benefit pension plans under § 430 of the Internal Revenue Code that were made by §§ 9705 and 9706 of the American Rescue Plan Act of 2021.

EMPLOYEE PLANS; EMPLOYMENT TAX; EXCISE TAX

Notice 2021-46, page 303. This notice provides additional guidance on issues relating to the application of § 9501 of the American Rescue Plan Act of 2021 (the ARP), which provides temporary premium assistance for Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage. This notice expands on guidance in Notice 2021-31, 2021-23 IRB 1173. The questions addressed include availability of the premium assistance to individuals eligible for an extension who had not elected it; whether premium assistance for vision or dental-only coverage ends due to eligibility for other health coverage that does not include vision or dental benefits; availability of premium assistance under a State statute that limits continuation coverage to government employees; whether employers may claim the premium assistance tax credit if the SHOP exchange requires employers to pay COBRA premiums and which party may claim the premium assistance tax credit in situations involving parties other than an insurer or former common law employer providing the COBRA coverage.

TAX CONVENTIONS

Announcement 2021-13, page 314. The competent authorities of the United States and the United Kingdom have entered into a Competent Authority Arrangement under paragraph 3 of Article 26 (Mutual Agreement Procedure) agreeing that references to the “North American Free Trade Agreement” in paragraph 7 of Article 23 (Limitation on Benefits) of the U.S.-U.K. Income Tax Treaty shall be understood as the “United States-Mexico-Canada Agreement” (“USMCA”) upon entry into force of the USMCA.

Announcement 2021-14, page 315. The competent authorities of the United States and the United Kingdom have entered into a Competent Authority Arrangement under paragraph 3 of Article 26 (Mutual Agreement Procedure) agreeing that U.K. residents may be eligible to qualify as equivalent beneficiaries for purposes of applying the derivative benefits test in paragraph 3 of Article 23 (Limitation on Benefits) of the U.S.-U.K. Income Tax Treaty.