Leaderboard

Generally?

Match and nonelective weren't late, unless there's an operational error based on text in the plan document requiring those deposits to be made immediately.

On the bright side, if the payroll was run for Christmas, you may be able to argue the "lateness" of the deposit didn't start until early January 2018, so this could be one year's 5330 instead of two to prepare.

Polite on message boards?? That's novel concept :) I think I like that!

I was trying to find a way to politely say "I don't want to ignore you but don't care enough to think about it" but then I realized what you were saying...we just report the bond that was in place at any time during the year, presumably the highest (or only amount if it is a new bond).

Each plan would calculate the maximum as if the other plan did not exist.

The January 10, 1975 temporary rules for ERISA § 412 (using rules made for § 13 of the Welfare and Pension Plans Disclosure Act of 1958) do not directly control how to respond to a Form 5500 query. Yet in evaluating the strengths and weaknesses of different reporting positions one might consider those temporary rules (to the extent a rule is consistent with ERISA § 412). If I were writing a memo and had research time to spend, I might research several sources, including the Federal Register notices about the development of Form 5500. Without research, I might consider reporting the beginning-of-year coverage because that reporting would allow the Labor department to check, using only Form 5500 data, whether the coverage amount likely met the ERISA § 412(a) minimum. Given the question’s ambiguity, several different good-faith reporting positions might be defensible.

I agree with the others that the first QDRO cannot be revised, so what you are looking for is a new QDRO. If you are not getting the answer you want from the existing divorce lawyer, then search around for a new one and ask each prospective attorney under what situations it would be possible to amend the property settlement and get a judge to sign a new DRO. If you find one that says yes, and who seems otherwise competent and appropriate, both ex-spouses can engage that attorney or firm (waiving the conflict) in the interests of speed and cost-savings. If the existing lawyer and a few prospective lawyers all tell you no, it's not likely to happen, then be ready to accept their advice. And maybe look for other options. Am I right that this new QDRO hail mary is just you searching for a way to get money out of the wife's 401(k) to pay off taxes? There are a few other ways to get money out, though they are far from ideal. One is to change jobs, which will allow her to elect a 401(k) distribution - which will be taxable, same as before. The formula to figure out how much you need to withdraw is: [total amount you must withdraw] = [tax debt being paid off] / (1 - [tax rate plus penalty rate]) So if you need to pay off $10k in taxes and the tax rate plus penalty rate is 30%, just for example, then you need to withdraw 10,000/0.7 or around $14,286. Another is to take a 401(k) loan, which she would repay on payroll (or, if her employment ends, she would probably have to repay in a lump sum or else get hit with a bunch of taxes). The benefit of a plan loan is the interest is usually low and at the end her plan still has money in it. But ultimately this sounds like a budgeting situation. Did they reach out to the IRS to negotiate a payment plan? The IRS charges interest but they will work with taxpayers, based in large part on your financial situation. I am guessing that their financial situation and credit scores are too weak to allow for additional mortgage, home equity line of credit, or unsecured personal loans? If none of those are possible, there are also the high-rate loans like auto title loans and payday loans. In those cases, a 401(k) loan would have a much better interest rate and relatively convenient loan administration. Also, as I pointed out before, it seems quite possible that only the alternate payee (the husband? whoever didn't have the 401(k)) owes the taxes on the failed rollover. Unless the divorce shared the bill for the taxes here, then when they filed their 1040s separately for 2018, I am guessing only the alternative payee had income from the 401(k), right? So if they have agreed to both share the tax debt, then they might need to execute some documents formalizing their agreement. If only the husband owes the tax, and he is low- or no-income, then he might be able to get a lot of the tax debt reduced. If the wife has steady decent income then her chances for tax debt reduction are not as good.

Yep. Each state has wealth written in as a requirement.

You're allowed to have both - you could do, say, 2% to traditional and 2% to Roth.

Was the amount reported as 401(k) on the W-2?

Once divorce is final, a Judge will usually only reopen if there is a compelling reason. That the both parties agree will probably go a long way but its not a guarantee. I'm sure there are judges out there who will say no my docket is full enough as it is. IF the settlement is changed, can the first QDRO be revised? Probably not, because the benefits have already commenced. (29 CFR § 2530.206 clearly states that a subsequent order can revise a prior order, but in their example payments have not yet commenced) IF the settlement is changed, can a new DRO be issued to cover the change in the settlement? Sure. A DRO does not fail to be a QDRO just because it is issued after benefits have been paid pursuant to another QDRO. It all really comes down to: will the court reopen and revise the settlement.

Getting another order from the court depends on state law and the status of the domestic relations proceeding. It is possible that if the matter is closed, the court will not reopen it for the convenience of the parties.

Probably because the Plan allows for ROTH-401(k) contributions would be my guess but why not call T Rowe Price for clarification.

Heaven's sake, the only advice should be FILE. An ounce of prevention is worth a pound of cure.

Yes. You still have to file a Form 5500. The 5500 reports more than just assets. If you skip 2018 and then file your first 5500 for 2019 with an initial effective date of 11/2018, you will get an IRS love letter asking for 2018.

Lot at stake for over 20. Seems like this should be handled under the guidance of an ERISA attorney, and with attorney-client privilege to protect the plan sponsor as much as possible. Really hard to get more specific here as much depends on the facts.