Leaderboard

If the owner is the only employee over age 21 and with a Year of Service, then that would be the case. Of course, if any other employee was over age 21 and completed a year of service for eligibility then they are also grouped with the owner. But yes, we do this if testing fails and if doing improves the results.

Here’s a quotation from the statute: If some or all of the information necessary to enable the administrator to comply with the requirements of this title [I of ERISA] is maintained by an insurance carrier or other organization which provides some or all of the benefits under the plan, or holds assets of the plan in a separate account, . . . such carrier [or] organization . . . shall transmit and certify the accuracy of such information to the administrator within 120 days after the end of the plan year[.] ERISA § 103(a)(2)(A), 29 U.S.C. § 1023(a)(2)(A). https://www.govinfo.gov/content/pkg/USCODE-2017-title29/html/USCODE-2017-title29-chap18-subchapI-subtitleB-part1-sec1023.htm

How about answering 10e "no" (or yes/0) and then amending the filing if/when the carrier provides the updated info?

Clearly not if that means waiting past the end of the filing deadline. And if it's a 12-31 contract year, doesn't the insurer have only 120 days to provide it? And were the commissions actually paid in 2018 rather than actually IN 2019?

About 5 years ago during EA meeting, I discussed a “last day rule” in a cash balance plan with Carolyn Zimmerman (the IRS actuary). She said that this provision is often missed by the IRS reviewers during the determination letter process. She suggested amending the plan to remove this provision. She also suggested using the relief under IRC 7805(b) so it would be allowed to amend this provision prospectively.

I believe for 2018 and 2019 they are key employees since they owned (or are deemed to own) more than 5% of the company in the current year for 2018 and the prior year for 2019. For 2020 and forward they would be former key employees.

Issue a corrected 1099-R with code G for the amount of the distribution less the amount of the refund. Issue a 1099-R with code 8 for the amount of the refund. The amount of the refund would be treated as an IRA contribution for the prior year. If this results in an excess IRA contribution, the participant may withdraw the amount from the IRA before their extended tax deadline in order to avoid the 6% excise tax. See EOB ch. 11, sec. VIII

My understanding is they would have until the due date of their tax return with extension for the year of loan offset to rollover the loan offset amount. That is if the loan is offset in 2019 you would have up until 10/15/2020 to complete the rollover. If he's trying to roll it over to the Plan you'll want to make sure the Plan will accept it, if he's trying to rollover to IRA should not be a problem.

The attained age (71) in the year the participant turned 70.5 (2018) will be used. Earnings are never considered with regards to late RMDs. An age 71 RMD based on the 12/31/2017 account balance should be taken as soon as possible. Then a Form 5329 should be filed requesting a waiver of the 50% penalty for reasonable cause.They should include an explanation of any "reasonable cause", such as I didn't know, I didn't remember or the dog ate my RMD form. Also, include proof that the 2018 RMD was taken. The waiver will almost certainly be granted by the IRS if the Form 5329 instructions for a waiver request are followed to the letter. The participant may or may not get a response from the IRS. An additional age 72 RMD with be required by 12/31/2019 based on the 12/31/2018 balance. Both RMDs will be taxable in 2019.

Well if creative is what you wanted here you go! Just find Marty McFly and take her back in time so she can terminate her plan before she turns 70.5. She puts all the money in an IRA and she is free to do what she wants! Too creative maybe??