State Taxes and EGTRRA

[Guest wolfman]

The state noncompliance issues concern me since most of my firms clients are in noncompliant states (NC, SC, GA). What are others doing? Are you sending a mass communication to clients concerning this? Thanks

[Belgarath]

We are sending a fairly generic newsletter to our clients on this. It's worth noting that this has happened with every major bill affecting qualified plans for as long as I can remember, which is longer than I care to contemplate! And it's never had much effect on clients establishing, maintaining, or contributing to qualified plans. This time I think it's a bigger deal for a couple of reasons - first, with the internet, there's just so much more communication and information that you get bombarded with it. Second, due to the breadth of the EGTRRA changes, there are many more potential traps. I mean, who ever heard of rolling non-qualified 457 money into a qualified plan before!

We're just recommending that clients discuss their particular state situation with their CPA/advisor before they make any decisions.

[Guest TrustMe401k]

Wolfman- I too am (was) concerned with the non-conforming states issue. Since most of my business is in NC I contacted my local state rep. I explained the situation and he said that the Legislature always (always???) passes a bill each year to have the state conform to fed tax issues. Now always is pretty difficult for me coming from a career politician but I have no douvbt that they will fix it in 2002. They are also business owners/employees who wish to benefit from the increased contribution/deduction levels.

You may wish to contact other reps/senators at the states level in the states where you have concerns.

Just my 2 cents.

[Guest wolfman]

Thanks for the responses Belgarath and jehmig.