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Congress’s HEART Act Is Benefits Headache

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The Heroes Earnings Assistance and Relief Tax Act of 2008 (P.L. 110-245), dubbed the HEART Act, provides benefits preferences to employees who are in the National Guard and Reserves. It will also impact your 401(k) plan and, if you have them, health flexible spending accounts (FSAs).

Ten 'Hut

The tax code has long contained preferences for employees who leave employment to serve in the military. In addition, the Uniformed Services Employment and Reemployment Rights Act (USERRA) requires that plans not discriminate against employees who leave for military service. The HEART Act supplements these two laws.


Make-up contributions. Employees returning from military service must be allowed to contribute pre-tax make-up contributions into their 401(k) accounts. Special rules also apply to employer matching contributions and employee after-tax contributions. Under the HEART Act, for years beginning after December 3...(register to read more)

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