Employee Stock Ownership Plan
Discover an easier way to oversee your ESOP
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Learn MoreComprehensive administration offered for complex employee stock ownership plans
Employee Stock Option Plans (ESOPs) provide a retirement benefit for employees, as well as tax benefits and a potential financing source for companies. But ESOPs also require extensive oversight. At First American Bank, we can ease your company's burden by handling recordkeeping, compliance testing, reporting and tax form-preparation requirements. Our experienced staff can administer both leveraged and unleveraged stock ownership plans, and can expand their services to include:- Calculation and allocation of shares released as payments are made on an ESOP loan
- Determination of disqualified persons/prohibited allocations based on S-Corp ownership under Internal Revenue Code section 409(p)
- Review of transactions to determine cost basis of shares acquired during the year and maintenance of cost basis of shares allocated to participants’ accounts
- Preparation of diversification notices and election forms
Benefits of Employee Stock Ownership Plans
By providing employees with ownership stakes in a company, you create a culture of shared success and alignment of individual efforts with the overall performance of the institution. This can lead to increased motivation, productivity, and a stronger commitment to customers and long-term growthFirst American also offers Employee Stock Ownership Plan Financing. If you want to know whether an ESOP is right for your company, contact our experts.
Disclosures
Not FDIC Insured | Not Bank Guaranteed | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank Deposit
Prior to 2020, you were required to start taking Required Minimum Distributions (RMDs) by April 1 of the year following the year in which you attained age 70 ½. That rule still applies if you attained age 70½ by the end of 2019. Once you are required to begin taking RMDs, you must continue. For 2020, the SECURE Act increased the age to begin RMDs to age 72 and then subsequently with the passing of SECURE Act 2.0 beginning in 2023, the age has been raised again. The schedule below outlines at what age you must begin taking RMDs.
Date of birth before 7/1/1949, RMD starts at age 70 ½. Date of birth 7/1/1949 to 12/31/1950, RMD starts at age 72. Date of birth 1/1/1951 to 12/31/1959, RMD starts at age 73. After 12/31/1958, RMD starts at age 75.
The same April 1 deadline applies. Thereafter, you must take RMDs annually on or before December 31. Note, two required distributions will be issued your first year if you wait until the period January 1 to April 1 to begin your RMDs. You may avoid two taxable distributions in the first year by taking your first withdrawal on or before December 31 of the year in which you attain the applicable age as shown above.
However, if you are still working, you are not required to begin RMDs from your employer sponsored plan until April 1 of the year following the year in which you terminate employment. This exception does not apply if you own more than 5% of the employer, nor does it apply to IRAs.
