Employer Unwittingly Includes Foreign Nationals in 401(k) Plan
Posted 14 July 2004 - 01:35 PM
right box on the adoption agreement so as to exclude from participation
foreign nationals with no US-source income. The employer was unaware that a subsidiary it had recently acquired employs about 4 or 5 French citizens residing in France.
Would it be possible to justify excluding the French nationals if, for instance, the plan defined compensation as W-2 compensation, and the adopting employer did not provide W-2 compensation to the French nationals?
If the employer were ultimately required to retroactively include the French citizens in the plan by contributing the equivalent of average salary deferrals and matching contributions on their behalf, exactly how would this be accomplished?
Where would the money go and how would it be reported? Its my understanding
that, absent a tax treaty provision to the contrary, the money would be
taxed to the French citizens upon contribution to the Plan, and upon
withdrawal, as well.
Posted 15 July 2004 - 10:41 AM
Posted 15 July 2004 - 11:45 AM
Posted 15 July 2004 - 12:13 PM
Posted 15 July 2004 - 01:09 PM
Posted 15 July 2004 - 01:35 PM
Posted 15 July 2004 - 01:39 PM
Posted 15 July 2004 - 01:51 PM
Posted 15 July 2004 - 04:16 PM
Jim Holland's position that no income means not in 401k testing, not even as zero seems to override so they would not even be zero's!
It looks like Mr. Holland just eliminated the need for the non-resident alien no source of US income problem.
You also have the 410 merger / acquisition period to fix the document. I don't see a problem here.
Posted 15 July 2004 - 04:39 PM
Posted 15 July 2004 - 05:38 PM
Your direct approach is much better than my attempt at subtlety