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Showing content with the highest reputation on 02/18/2022 in all forums
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Missed Deferral Opportunity
R Griffith and one other reacted to David Schultz for a topic
Just to be sure that this is clear: there is no circumstance under EPCRS in which the employer will make an after-tax corrective contribution. The calculated ADP is a combined ADP for all deferrals (pre-tax and Roth). In your fact pattern, the participant gets one corrective contribution of .5625%, all it pre-tax. Not .5625% for pre-tax, and another .5625% for the Roth. It does not matter if the participant would have elected to make his deferrals as all Roth or all pre-tax, or a combination - there is one corrective QNEC and it is all pre-tax.2 points -
Yup There used to be a time you could try asking for the penalty to be waived but with it being so large now the risk isn't worth doing that any more. You file DFVCP 100% of the time.2 points
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I wouldn't file late WITHOUT DFVCP. Unless the DOL came knocking and I wasn't able to use the program. File it late (with the DFVCP button checked) and go thru the DFVCP procedures. It will tell you what the late fee is, and it won't be more than 750 for a small plan filer (for one year; you get two or more years for a grand total of $1,500)2 points
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Self-directed IRA / Prohibited Services to Plan Asset
R Griffith reacted to EBECatty for a topic
Just to be clear (i) this individual bought 100% of an operating business with his IRA, (ii) he is not involved at all in managing the business, (iii) the IRA's value is "well" over $100 million, (iv) the relevant facts are unknown, and (v) advice on a PT that could disqualify the entire IRA is being solicited on an anonymous message board? I would strongly suggest a different approach.1 point -
Steep Penalty
ugueth reacted to imchipbrown for a topic
This is why I retired 😁1 point -
Steep Penalty
David Schultz reacted to Lou S. for a topic
Don't be late?1 point -
Steep Penalty
David Schultz reacted to Peter Gulia for a topic
Beyond confirming that Congress in 2019 enacted the change you describe, what information do you seek?1 point -
EPCRS and the ADP test are blind to whether a deferral is pre-tax or ROTH eligible, and combine all deferrals into one calculation. The QNEC is an employer allocation(and therefore pre-tax); it will go into an 100% vested Employer source(even if the Plan does not have another Employer source the document allows for QNECs by default), not the deferral source. If the ADP is 2.25% then 25% is .5625%, doing both as you describe would be a 50% QNEC.1 point
