What happens if a VCF does not meet the minimum threshold?
If a voluntary contribution fund does not receive the required dollar amount of contributions the fund is repealed and removed from the tax returns the following year. Example: A fund did not meet the minimum contribution threshold in 2006. The fund would be removed from the 2006 tax return, which is filed in 2007. When a fund does not meet its threshold, it becomes inactive until it is repealed by and is removed from statute. It cannot be “reactivated.” New legislation would be required to put a fund back on the return that has either failed to meet its threshold, or if repealed by statute.
