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Get it from the client. Otherwise, you incur the liability for any error that occurs due to using incorrect compensation.

When a plan is top heavy, it is sometimes useful to amend the plan to set a $0 limit on elective deferrals for Key employees. This allows the Key employees to make contributions which will be automatically reclassified as catch-up contributions (provided they are eligible to make catch-up contributions) because they exceeded the plan-imposed limit of $0. Since catch-up contributions are disregarded for application of 416, this is a way to allow the Keys to contribute without triggering the top heavy minimum. I am wondering if there is a way to specify that the $0 limit automatically applies in years when the plan is top heavy, and only when the plan is top heavy. In our adoption agreement (FT William) there is a checkbox in the "Minimum and Maximum Deferral Amounts" section for "Other limitations on Elective Deferrals (specify): ________". I am thinking of putting in that blank something along the lines of, "If the Plan is Top Heavy for the Plan Year, the maximum Elective Deferral contribution for Key Employees shall be $0 for the Plan Year." Possibly also adding "The application of this limit shall not restrict the Key Employee's right to make Catch-up Contributions, if they would otherwise be eligible to make Catch-up Contributions" just to be clear. Any thoughts or opinions on this approach? Are there any issues with determining the plan limit based on the top heavy status? In theory, the plan administrator could know by the first day of the plan year whether or not the plan is top heavy for the current year, and so can adjust the keys' limits if needed. Would this kind of language jeopardize the plan's preapproved status?

The client choose that provision. If it is too much of a burden to get you the partial year data they can always amend the plan.

OK. I don't think you're missing anything. Assuming the change from partnership to LLC does not require a new EIN (I don't know about this), then as far as IRS is concerned they have a partnership continuing to file a 1065, same entity, same EIN, just a change in name. Same thing on the plan, the 5500 will still be under the same EIN, so there is no real change from the reporting side, other than the plan name, which you noted will be shown on the next 5500. What would you tell the IRS, how would you do it (no form for this) and why would they care?

Be careful with dual eligibility if the Plan is top-heavy. You'll have to make the top-heavy contribution for the employees who are eligible to make 401(k) deferrals,notwithstanding that they are not yet eligible for match.

Depends on my mood. I might use 002 or 003. 001 seems like it is setting up for just what BG describes, which I'd rather avoid.

For qualified plans, moving expenses are part of a category usually called "fringe benefits" which includes taxable reimbursements or other expense allowances, fringe benefits (whether taxable or not), moving expenses, deferred compensation and welfare benefits. The 401(k) plan document will (must) dictate whether or not these items are included or excluded for plan compensation purposes for making contribution allocations. However, for certain tests, these items might be included anyway (like 415 limit testing). Your plan document might specify exactly which moving expenses are excluded. If so, it might only exclude the "qualfied"moving expenses (see next paragraph). It may also be written to exclude all amounts paid as described in the company's relocation policy. Again, for contribution allocation purposes, it depends on the language in the plan document, the laws/regulations/etc do not require plan sponsors to include or exclude certain items. Overall, the compensation used for allocation purposes needs to be considered nondiscriminatory (not designed in favor of the Highly Compensated Employees). With regards to moving expenses overall, depending on how your company's plan is structured, my memory recalls that moving expenses are included on the employee's W-2 as income (and they are subject to FICA). The employee then reduces their income on the front of their Form 1040 by completing Form 3903 and deducting the "qualified" moving expenses. By "qualified" moving expenses, I mean only those amounts that fit in box 1 and 2 of the Form 3903. All of the other moving-related costs, like temporary housing, meal allowances, etc. should appear as taxable wages (also subject to FICA) in box 1 of the W-2. I'm no CPA, so you should check out the info from that last paragraph with a qualified professional.