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Much more complete response than mine. But, while we are at it..... you are free to re-perform the a4 test for 2018 to satisfy the test. You aren't locked in by what the prior TPA did or assumed. So, accrued-to-date, restructuring, otherwise excludables... go to town!

Read the plan document carefully. Chances are that it states that additional profit sharing contributions will be provided as necessary to satisfy the minimum gateway. If this language is there, then you have an operational failure due to failure to follow the plan document, which can be corrected under SCP. If the plan document does not contain the gateway language, then you have a demographic failure, which can not be self corrected and must go VCP as Mike stated.

It is NOT prohibited, which is why you can't find it. Your post alludes to the fact that the client had the documents but now can't find their documents and would like copies. When a client leaves us, we send them a formal letter that includes the information that all items necessary for the new servicer have previously been provided to the client and if anything is needed from our files, there will be storage retrieval costs and copying costs (with a minimum of something less than $100). All the documents we have are OUR documents and records, not the client's. Any documents provided by the client (for example, when we take on the client) are copied for our files and the originals given to us are returned. The fees do need to be reasonable FOR MATTERS BEFORE THE INTERNAL REVENUE SERVICE, but it you are not involved in that (because you no longer work for that client), even that section of the Circular is not applicable.

Then you can't do it. Notice 2016-16 covers permissible mid-year changes to safe harbor plans, and prohibits a mid-year change to reduce or narrow the group of employees eligible to receive safe harbor contributions.

CPA friend? He/She better hope you find a solution, because otherwise, friend or no, you need to tell the client that your CPA friend committed malpractice. So, let's get all the facts before we launch... is it an ez or an sf?

You can't confirm it because you are looking for something that is not there. The numbers are done for the plan year; doesn't matter when the discretionary match was made.

The major thing you need to be aware of with using different eligibility for deferrals and safe harbor match, is that you no longer get your free pass for top heavy. If the plan ever becomes top heavy, you will be subject to the top heavy minimum, even if the only other employer contribution for the year is the safe harbor match. Other than that, there is no problem with having different eligibility requirements for deferral and match. For the ADP test, the employees who have not completed 1 year of service are disaggregated as otherwise excludable, and as long as they are all NHCE that group does not need to be tested. For the other group they satisfy the ADP/ACP test by way of the safe harbor match.

Maryland still says 7.75% according to the link below. https://www.marylandtaxes.gov/forms/Tax_Publications/Tax_Facts/Withholding_Tax_Facts/Withholding_Tax_Facts_2020.pdf

Generally deferrals have to be withheld from amounts paid during the year. Was the pay and the deferral included in their 2019 W-2?

Compensation for the ACP test must be 414(s) compensation. If you are using anything other than a safe harbor definition of compensation, such definition has to be reasonable, and it has to satisfy the compensation ratio test. I have no idea whether a definition that excludes all pay after a given date would be considered "reasonable."

NO

It's a reasonable question, and until we have guidance, we won't know if the IRS adopts a reasonable position. But I vote for the first method because of how the payback is being treated. Since the taxable distribution amount is going to be reported as $100,000 (the 1099R for the first year) and the payback is considered a rollover not a reduction on the payout, I'm guessing he reports $100k as the distribution, includes 1/3 in income, and then reduces his income by the amount of the payback that year (and future years if it is not all used up). But this is just my guess. So, he reports $33k, reduces that to taxable amount of $0 in each of the first two years, and reduces the third year amount by the balance for a $25k taxable amount. If he can come up with the extra $25k in year three, he would be able to reduce his income by that $25k so that his taxable distribution over the 3 years is now zero.

The HHS Secretary's declaration is in effect until the Secretary rescinds the declaration, to a maximum of 90 days (see below). If you check the HHS web page on these declarations you will see that it is common for them to be renewed as needed. I would think this one will be extended. https://www.phe.gov/emergency/news/healthactions/phe/Pages/default.aspx 42 U.S.C.United States Code, 2009 EditionTitle 42 - THE PUBLIC HEALTH AND WELFARECHAPTER 6A - PUBLIC HEALTH SERVICESUBCHAPTER II - GENERAL POWERS AND DUTIESFrom the U.S. Government Publishing Office, www.gpo.gov §247d. Public health emergencies (a) Emergencies If the Secretary determines, after consultation with such public health officials as may be necessary, that— (1) a disease or disorder presents a public health emergency; or (2) a public health emergency, including significant outbreaks of infectious diseases or bioterrorist attacks, otherwise exists, the Secretary may take such action as may be appropriate to respond to the public health emergency, including making grants, providing awards for expenses, and entering into contracts and conducting and supporting investigations into the cause, treatment, or prevention of a disease or disorder as described in paragraphs (1) and (2). Any such determination of a public health emergency terminates upon the Secretary declaring that the emergency no longer exists, or upon the expiration of the 90-day period beginning on the date on which the determination is made by the Secretary, whichever occurs first. Determinations that terminate under the preceding sentence may be renewed by the Secretary (on the basis of the same or additional facts), and the preceding sentence applies to each such renewal. Not later than 48 hours after making a determination under this subsection of a public health emergency (including a renewal), the Secretary shall submit to the Congress written notification of the determination.

I think they were always a better place to apply to be honest. We had a lot of clients get approved through community banks, and the stories I have heard from the big banks have been pretty bad. I think an issue that still remains that most lenders will process current clients first, so if you don't bank at ABC Bank, your chances of getting processed before funds run out are relatively small.

I think the plan must accept rollovers, which typically isn't the case with a DBP.

This seems to be coming up more and more in my world, more with regard to the Federal withholding. Is it true to say that the former Employer Plan, if it does NOT offer COVID distributions, would treat this like any other terminated participant distribution (i.e. 20% Federal withholding if not rolled over)? Then the participant will handle the taxation part on their end when they file their personal return for 2020? - Or - is the former Employer supposed to process this as a COVID based on the former participant's presentation that it is a COVID distribution even though there is no intention to add the COVID provisions to the "old" Plan? Some of our clients are getting pushback from former participants that no taxes need be withheld as a COVID distribution (they claim to be furloughed now due to COVID at their current employer). Our client's plan did not adopt for COVID withdrawals because they are an essential Employer and not currently needing to add the provisions.

Can't she do that either way since she terminated? or is there a wait? If former employers plan offers CRDs, the answer is yes. For tax purposes, the answer is yes, regardless of former employers CRD election.

No doubt in my mind. The plan doesn't care where the repayments come from, assuming the loan policy doesn't say upon death it is defaulted (which it shouldn't).

Ray, on the service credits, I meant for eligibility as well as vesting. We do have an employee in Mandeville and I work with a big advisor in that area. Don't get there as often as I would like.

Ask the participant

A qualified individual includes an individual "who experiences adverse financial consequences as a result of ... closing or reducing hours of a business owned or operated by the individual due to such virus or disease." If the owner can't drum up the work, then it seems to me that the business would be experiencing reduced hours, thereby making the owner a qualified individual.

If it is not addressed in the loan policy then I'd say you are free to do what seems reasonable. I think it is reasonable to allow the payoff. I can't imagine any consequences as long as it is not in direct contradiction to plan terms/loan policy.

I believe you are correct. If you look at the Schedule SE and the 1040 it is pretty clear they are developed separately - neither the partner's pension deduction not the health insurance deduction are factors in the SE tax.

Can't believe they would be out of luck. And if the current interpretation is that they would be, then the IRS will "clarify" things at some point to confirm the current interpretation is wrong. Betcha.

When contributed back under the rules, the money looks just like it did before it came out. Given that situation, how can you show it as anything other than normal pre-tax funds?

The IRS did answer the question for the FFCRA (emergency sick pay and EFMLA) in their FAQs (#34) of "Covid-19 Related Tax Credits " and I have to wonder if that gives some clue as to how self funded plans would calculate it under CARES. Just a thought, no real experience.

I do not think they have procedures in place for this at this time. I would prefer to wait a bit to see what happens but participants are calling in large #s. I was thinking that we could extend the clock on the 12 month suspension until later on and not worry about the loan defaulting based on the cure period. For example, if the first missed loan date is 04/02/20, the end of the cure period would be 09/30/20. If we requested the 12 month suspension in August 2020, the participant would have until August 2021 to start repaying. Not sure if this is ok.