In this release, we cover key highlights from Internal Revenue Bulletin 2025-8, including IRS rulings, SECURE 2.0 retirement plan changes, tax updates, and digital content classification rules.
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The Internal Revenue Bulletin (IRB) is the authoritative instrument for announcing official rulings and procedures of the IRS and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of general interest.
EMPLOYEE PLANS
REG-100669-24, page 819.
These proposed regulations would provide guidance regarding a change made by the SECURE 2.0 Act that requires certain retirement plans to automatically enroll eligible employees beginning in 2025. Among other exceptions, this requirement does not apply to plans established before December 29, 2022. These proposed regulations also would amend the rules regarding notice requirements for plans that include eligible automatic contributions arrangements to reflect changes made by the SECURE 2.0 Act. The proposed regulations would affect participants in, beneficiaries of, employers maintaining, and administrators of these plans.
EMPLOYEE PLANS, EXCISE TAX
Notice 2025-12, page 813.
This notice provides the indexing factors to be used by group health plans and health insurance issuers to calculate the qualifying payment amount (QPA) for items or services provided on or after January 1, 2025, and before January 1, 2026. The QPA is the basis for determining individual cost sharing for items and services covered by the balance-billing protections in the NSA, under certain circumstances. The QPA for a given calendar year is based on information regarding median rates for certain items and services from prior years and is indexed based on changes in the consumer price index. In addition to providing the indexing factor for adjusting 2024 amounts for 2025, the notice also provides cumulative adjustments for prior years.
EMPLOYEE PLANS, INCOME TAX
REG-101268-24, page 836.
These proposed regulations would provide guidance for retirement plans that permit participants who have attained age 50 to make additional elective deferrals (catch-up contributions) under section 414(v) of the Code. Specifically, these proposed regulations would amend the regulations under sections 414(v), 401(k), and 403(b) to reflect statutory changes made by section 603 of the SECURE 2.0 Act of 2022 (SECURE 2.0 Act), which require that catch-up contributions made by certain catch-up eligible participants be designated Roth contributions. These proposed regulations also would amend the regulations under section 414(v) of the Code to reflect the statutory changes made by sections 109 and 117 of the SECURE 2.0 Act, which increase the catch-up contribution limits under section 414(v) of the Code in certain cases.
REG-118988-22, page 869.
Section 162(m)(1) generally limits to $1,000,000 the allowable deduction for a taxable year for applicable employee remuneration paid by any publicly held corporation with respect to a covered employee. Section 9708 of the American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2, 135 Stat. 206 (2021)) amended the definition of “covered employee.” In addition to the principal executive officer, principal financial officer, and the three other highest compensated executive officers for the taxable year or any previous taxable year, ARP added §162(m)(3)(C) to expand the definition of “covered employee” to include any other employee who is among the five highest compensated employees for the taxable year. This amendment is effective for taxable years beginning after December 31, 2026. The proposed regulations propose guidance on the application of §162(m) as amended by section 9708 of ARP.
INCOME TAX
Notice 2025-6, page 799.
This notice requests comments on any potential implications if the characterization rules currently contained in §§1.861- 18 and 1.861-19, as amended and added, respectively, by Treasury Decision 10022, were to apply to all provisions of the Internal Revenue Code, including the need for additional guidance, and seeks specific comments on the possible impacts and guidance that may be necessary with respect to certain identified provisions.
Notice 2025-8, page 800.
This notice contains modifications to Notice 2023-38, 2023- 22 I.R.B. 872, that are similar to the modifications contained in section 3 of Notice 2024-41, 2024-24 I.R.B. 1615. For electing Applicable Projects, this notice modifies and supersedes Notice 2024-41 by expanding the elective safe harbor cost table in Notice 2024-41 for Solar Photovoltaic (PV) facilities to include updated cost percentages, providing new cost percentages for PV modules that incorporate crystalline silicon PV cells and wafers that are manufactured in the U.S., renaming, redefining, reclassifying, and removing certain solar PV components, and expanding and clarifying the type of facilities eligible to qualify as a representative type of solar PV facility. This notice further modifies and supersedes Notice 2024-41 by renaming certain components for the Land-Based Wind Table; renaming, redefining, and reclassifying certain Battery Electric Storage System (BESS) Table components; providing updated cost percentages for these BESS components; and permitting taxpayers that are eligible to claim a Domestic Content Bonus Credit by virtue of the 80/20 Rule to elect to use the safe harbor cost tables in this notice, or the safe harbor in Notice 2024-41, before Notice 2024-41 is superseded.
REG-107420-24, page 854.
This document contains proposed rules for determining the source of income from cloud transactions for purposes of the international provisions of the Internal Revenue Code. These proposed rules would generally affect taxpayers who earn gross income from engaging in cloud transactions.
REG-116085-23, page 865.
These proposed regulations would require multi-year tax reporting for corporate separations and related transactions. The information to be reported under these proposed regulations would establish the taxpayer’s position that the corporate separation and related transactions qualify for nonrecognition treatment under subchapter C of the Internal Revenue Code.
Rev. Proc. 2025-13, page 816.
The revenue procedure provides a streamlined method by which taxpayers who have elected the application of the alternative tax under section 831(b) may obtain automatic consent of the Secretary to revoke such election by making certain representations.
T.D. 10022, page 773.
This document contains final regulations modifying the rules for classifying transactions involving computer programs, including by applying the rules to transfers of digital content. These final regulations also provide rules for the classification of cloud transactions. These rules apply for purposes of the international provisions of the Internal Revenue Code and generally affect taxpayers engaging in transactions involving digital content or cloud transactions.