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Partner contribution too large during the year


Guest Peggy806
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Guest Peggy806

Partner made contributions to the safe harbor source during the year in the amount of 20,800. Obviously, some of this needed to be moved to profit sharing. However, his income was far less than expected and we have about 7500 that he is not going to use for 2009. Can this be refunded to him by 4/15/10 or should it be forfeited?

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Was he age 50 by the end of 2009?

Is his far-less-than-expected 2009 income going to be less than $20,800?

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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Guest Peggy806
Partner made contributions to the safe harbor source during the year in the amount of 20,800. Obviously, some of this needed to be moved to profit sharing. However, his income was far less than expected and we have about 7500 that he is not going to use for 2009. Can this be refunded to him by 4/15/10 or should it be forfeited?

I must not have explained it correctly. He put in more than he wants to allocate to himself. He is under 50 and already took care of the 16,500. The 20,800 was put in the plan and he can only use part of that for the 3% NEC. He only wants to use part of the remaining amount for profit sharing. Can we give him the balance plus earnings out of the plan or do we have to forfeit the overage?

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Partner made contributions to the safe harbor source during the year in the amount of 20,800. Obviously, some of this needed to be moved to profit sharing. However, his income was far less than expected and we have about 7500 that he is not going to use for 2009. Can this be refunded to him by 4/15/10 or should it be forfeited?

I must not have explained it correctly. He put in more than he wants to allocate to himself. He is under 50 and already took care of the 16,500. The 20,800 was put in the plan and he can only use part of that for the 3% NEC. He only wants to use part of the remaining amount for profit sharing. Can we give him the balance plus earnings out of the plan or do we have to forfeit the overage?

Off the top of my head, doesn't sound like the kind of error that permits it to be paid out, but check these threads

mistake of fact ER deposit and mistake of fact

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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What kind of feature lets an individual partner participant elect the amount of contribution other than an elective deferral?

The wink-wink one.

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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