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shERPA

SIMPLE DFI Wont accept late deposit

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A brokerage firm holds SIMPLE IRA accounts for a firm.  The employees' 2018 deferrals were deposited timely, the owners' (married couple) deferrals were withheld in a 12/31/18 payroll but not deposited by 30 Jan 2019.   They went to deposit them in February and brokerage firm won't take them, says it is too late.  Showed them the IRS "fixing mistakes" website which discusses a correction by depositing lost earnings, but it doesn't explicitly say the actual contribution has to be deposited.  So they won't accept it.

Yes, seriously.  Anyone have experience with a better informed brokerage firm they can transfer to and still make their 2018 contributions that were withheld? 

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5 minutes ago, shERPA said:

A brokerage firm holds SIMPLE IRA accounts for a firm.  The employees' 2018 deferrals were deposited timely, the owners' (married couple) deferrals were withheld in a 12/31/18 payroll but not deposited by 30 Jan 2019.   They went to deposit them in February and brokerage firm won't take them, says it is too late.  Showed them the IRS "fixing mistakes" website which discusses a correction by depositing lost earnings, but it doesn't explicitly say the actual contribution has to be deposited.  So they won't accept it.

Yes, seriously.  Anyone have experience with a better informed brokerage firm they can transfer to and still make their 2018 contributions that were withheld? 

Um... why don't you just tell the brokerage firm to treat them as 2019 contributions and then deal with IRS when they do a correspondence "audit" on the incorrect reporting from the brokerage firm.  That might be easiest. FWIW.

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2 hours ago, Larry Starr said:

Um... why don't you just tell the brokerage firm to treat them as 2019 contributions and then deal with IRS when they do a correspondence "audit" on the incorrect reporting from the brokerage firm.  That might be easiest. FWIW.

She might do that, but she already explored that with them, and they will then not accept the "real" 2019 contribution because the limit will have already been met.   She may have to just move to a different brokerage firm for the IRA.

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I have nothing constructive to say. But I would have plenty of things to say if it weren't the time of year where I had no time to say them. Simple huh?

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18 hours ago, shERPA said:

She might do that, but she already explored that with them, and they will then not accept the "real" 2019 contribution because the limit will have already been met.   She may have to just move to a different brokerage firm for the IRA.

Yeah, I see the problem.  Go to the bank and open a SIMPLE IRA money market fund.  Transfer to the brokerage firm as a direct transfer at some near point in time.

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I had a brokerage try to tell the plan sponsor that the plan had exceeded the contribution limits for a plan year and they would not accept the additional contributions.  The brokerage did not know that the contributions in the early part of the year were for the prior plan year.  In a pleasant communication with the brokerage, I said I did not realize they had any fiduciary responsibility for monitoring plan contribution maximums.  When they heard the words "fiduciary responsibility" they ultimately decided they did not have and did not want that responsibility and agreed to accept the contributions.  They are simply the custodian.  (Unless they are in fact considered the plan administrators.)

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