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An S corporation owner is a shareholder employee, not an owner employee. We see no justification for any other tortured interpretation. If they meant owners of S corps, I can guarantee they would have said S corps SOMEWHERE. They did not. And the only statutory definition is as posted by my alter ego!

If the plan was ERISA-governed, it had a Form 5500 requirement, however limited, for all years. The delinquent-filer system will take any number of reports. A year ago, a client with my sitting-at-the-computer help filed a quarter-century of reports under one $750 DFVCP payment.

Our practice for 30+ years has been to file the last 7-8 years. We have never had a client questioned for doing that. On the other hand, the omission is open literally forever and there is no statute of limitations so there is some caveat emptor.

If the records are incomplete, it takes some tolerance and patience to reconstruct a plan’s financial statements. I used the most recent information, which was fuller, and worked backwards—for some elements extrapolating an estimate based on the known amounts. For example, if your knowns are opening and closing balances, contributions, and an absence of distributions, one can interpolate an investment gain or loss. Or if an investment gain is known or sensibly estimated from mutual funds’ published information, one can extrapolate an opening or closing balance. My client had records on contributions. Whatever your client estimates is better than not reporting.

CRDs are temporary, so no, you would not want to generally amend distribution timing unless you wanted to keep it that way. Just amend for CRDs by 2022 deadline, but be sure to do so in conformity with how the plan was administered, whether to the fullest extent of the law or on some other restricted basis.

The sloppy language all around causes much confusion to those that don''t do a deep dive. (3) Owner-employee. The term "owner-employee" means an employee who— (A)owns the entire interest in an unincorporated trade or business, or (B) in the case of a partnership, is a partner who owns more than 10 percent of either the capital interest or the profits interest in such partnership. To the extent provided in regulations prescribed by the Secretary, such term also means an individual who has been an owner-employee within the meaning of the preceding sentence.

The amendment excluding employees to be leased out to other companies from the current plan can't be made in the middle of a plan year. Make sure the client understands that passing coverage testing assumes that the employee leasing business doesn't become too large as a % of the company. Will the cost / administrative burden of having two plans be less than the projected cost of contributions if the employees to be leased remained eligible for the 4% safe harbor match? Other than that, everything sounds fine.

Agreed, the instructions say any method may be used as long as it is done consistently. We do everything* on an accrual basis so the contribution ties to the business tax return, as suggested above, and also to make sure everything reconciles. It would drive me nuts to do a cash basis report (quickly) and then find out that there were errors in the deposits; I'm not sure how you even reconcile in that scenario. Or maybe others just trust that there are no errors and move on? That gives me chills. *Except for one, or maybe two takeovers. We do financials and accounts on an accrual basis and then convert to cash for the tax return and it creates a lot more work that way.

Are the references saying CRD's start March 27 referring to the new distributable event rather than the tax changes? I don't see an effective date for the section that added the new distributable event. It makes sense to me that the new distributable event would not be available until the law was signed. Until guidance is issued, all we have to go by is a reasonable good faith interpretation of the new law. The Act is clear that the tax treatment applies retroactively to 1/1/2020.