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Cub Scout Feldt gave you the correct answer in both responses.

Yes. Take a look at IRS Notice 2016-16: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwjC5vPSlMXmAhVHZ80KHQiPBPsQFjAAegQIBRAC&url=https%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-drop%2Fn-16-16.pdf&usg=AOvVaw0WCEJy-VYCn2e8f-i6FC6l

The question that led me astray was the one that said "Since they are self employed, do they file a Schedule C?" because by definition, self-employed HAVE TO FILE a schedule C. Your confusion is in paying any attention to 1099s. Basically, you ignore them. The client/accountant has to reflect all the earned income on the Schedule C (or K-1 if it's a partnership) and that will include anything reflected in 1099s that the client may get. But it is the Schedule C that matters; ignore 1099s. Does that help?

The questions you are asking show little knowledge of the important things we deal with and the tax system generally. What is your position? These are fundamental questions; depending on your role in this, it sounds like you need professional assistance. I take it you are neither an accounting firm nor a retirement admin firm. Fill us in on where this is coming from and we might be able to suggest your next steps to gain understanding of what is needed.

I think this would violate the contingent benefit rule of 1.401(k)-1(e)(6)(i) - you would be conditioning the right to make future deferrals on having made deferrals in the past.

Prior discussion on changing eligibility from immediate to 1 year.. See RatherBeGolfing replies... It is allowed to "un-participate" a previously eligible participant. From the linked thread... reply by RatherBeGolfing... ************************* There was absolutely a clear answer at Annual but some in the audience did not want to accept the answer. The answer is that if you have immediate eligibility and later change that eligibility to something else, those who have not met the new eligibility are now not eligible to participate. There are no cutback issues here (which is what Brian was saying in his session and Sal confirmed during the general session the next day). But wait there is more... If you want the people who are in the plan to stay in, simply make your amendment prospective and you won't have any issues. As for discrimination issues, you should be fine changing the eligibility within the statutory limits. *************************

I think you have the same 204h timing issue. Would not the increase in hours requirement result in an expected decrease in the rate of accrual? In which case your amendment could not take effect until after 1/1 and then participants would already have earned an accrual, at least on 2020 comp to date. Also be careful in case you have any flat dollar credits. If all participants were expected to work 1000+ hours then maybe the amendment would not necessitate a 204h notice - but remember that IRS can take a series of amendments and consider them as one, the reason being to prevent circumvention of various rules, which is what you are trying to do here, so a savvy agent (don't laugh people) could say you did not comply with 204h on that basis. I would tread lightly, do 204h now and freeze effective 15 days hence and provide minimal 2020 credit (assuming no flat dollar amounts, especially for HCEs). If the first 2020 payroll doesn't happen until 1/10 say, then maybe your argument can be zero plan compensation thru 1/3, for example, and so no credits on that basis. Good luck