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Well, you may get different opinions from different folks. I would say you are ok for accepting employee self-certification that the employee lacks other resources to satisfy the need. As to approving the AMOUNT/NATURE of the need, yes, it is possible to accept employee certification, but the procedural requirements are fairly rigid. Many employers/TPA's find it easier and "safer" to continue to request source documents for substantiation of the nature and amount of the hardship need. The IRS audit guidelines give guidelines for acceptable substantiation for either source documents, or a "summary" of information, etc. FWIW, we still have our clients obtain source documents. (bills, eviction/foreclosure notices, etc., etc.)

Final assets $0 PYB = 1/1/2022 PYE = Date of final distribution Yes, Short plan year. Use 2021 form. If filing on paper cross out 2021 and write 2022. If filing electronically, should be no problem if PYB/PYE date are correct.

That is, taxed as ordinary income at whatever incremental rate bracket applies to your situation. I assume FICA and Medicare taxes were applied during the accumulation of your account, otherwise those taxes would be due as well.

Mr. Bill, Thank You for taking the time to answer my question. I'm glad I don't need to do anything additional for my taxes. Have a great day, Rita.

I don't think so. I get where you are coming from but it's almost like saying if a plan didn't have profit sharing contributions, you couldn't add that mid-year because you are potentially taking away money from other employer contributions (e.g. matching).

Ms Rita, The QNEC is an employer contribution and doesn't count against your $20,500 limit. You're eligible to defer the additional catch up amount in 2022 as long as you turn 50 anytime during 2022. So, if you want to do the additional deduction, contact HR/payroll. There are no IRS forms that you need to complete related to the QNEC. FWIW, QNEC stands for Qualified NonElective Contribution. It's an employer contribution typically made to allow the plan to pass a discrimination test rather than give refunds back to people. Since it's an employer contribution, it won't show up on your w-2 at all.

Yes, but not by much. I would also say that there is no reason to NOT have a bond with an inflation guard / escalation rider/ add your favorite name here. There is just not enough of a premium difference.

I believe it depends upon the company. I've seen "packages" where price is locked in for 2 or 3 years, even if bonding amount increases, etc., etc. - but I really don't have any direct contact with actual insurance companies for ERISA bonds - we just tell the employer to get the bond, and to contact their insurance broker. Here's the list of approved vendors: https://www.fiscal.treasury.gov/surety-bonds/list-certified-companies.html

If you are working on the 2021 plan year, then the bond is generally based on the prior year value - while most folks use the prior year 12/31 value, it technically is the highest amount handled during that prior year. If the value increases during 2022, you don't need to increase the bond. Most of them that I see now have an automatic increase rider on the bond as assets increase.

It will be added to your annual income for tax purposes.

The plan pays you $1500 in fees and you refund a prior fee (presumably paid by the company)of $1500 to the company .

I think that's spot-on.