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Are you sure that's what the plan says? Read the exact wording in your plan document. I bet it actually says something to the effect that non-resident aliens with no U.S.-source income are excluded. If someone worked in the U.S. then they would not fall under that excludable employee classification, even if they are not a citizen and not a permanent resident.

Seems like your situation is similar to the one described in rev. rul. 66-144. The IRS ruled that the extension was valid for purposes of extending the deadline to make a plan contribution. https://www.taxnotes.com/research/federal/irs-guidance/revenue-rulings/rev.-rul.-66-144/d5wt

Well, it is generally considered un-American to accept any personal responsibility for your own actions. Now, in a reasonable world, of course the participant should share responsibility for ensuring that their election was implemented. I've seen deferral election forms that specifically state that the participant is responsible to ensure that deferrals are withheld according to their election, but the validity of this approach is questionable, even when it is specifically stated. The question is, will the IRS/DOL agree that the employer can skip the correction for the deferral piece, when it comes up upon audit or complaint? I don't believe there is any statutory or regulatory basis for denying this participant the make-up for deferrals. IMHO, the employer needs to swallow the poison pill and make the QNEC. I don't see this as a fight worth having.

The new method of counting only participants with account balances is effective for 2023 Forms 5500. The plan will need an audit for 2022.

I would treat it just like failed ADP test after total distribution. (See instruction to Form 1099-R the procedure is in there) I believe the procedure is you amend the 2022 1099-R and issue 2 1099-Rs, one for the excess contribution and the other for the rollover. The excess contribution is not eligible for rollover so the participant needs to be instructed to remove the excess contribution (along with earnings/loss). The IRA should have forms to remove the excess IRA contribution. It does not need to be returned to the Plan.

This sounds like a discussion posted not that long ago - is it the same situation? I have no current year (2022) solution, sorry, but I thought the group came to a consensus that amending the allocation formula to individual allocation groups would enable the employer to accomplish its objective of excluding employees not employed on the contribution determination date (or deposit date or however else they wanted). Assuming the number of exclusions did not create a coverage problem, if the profit sharing was a uniform percentage of pay there would be no testing issues.

Agree with CBZ with a caveat for #3 that assumes the categorical exclusion relates to all employer contributions under the plan (i.e., not excluded for SHNE but excluded for PS).

A terminating plan never HAS to restate but it must be compliant with all laws/regulations as of the termination date. You should only need to update for any SECURE 2.0 provisions effective prior to 2023, if any. For DBPs, I don't think there is anything.

1. Not included 2. Included 3. Not included For purposes of determining the deduction limit in a profit sharing plan, you only count the compensation of employees who are beneficiaries of the plan, defined as anyone who actually receives a contribution for the year.

The 80-120 rule allows you to file the same form you filed last year. But if you are already a large plan, you need drop below 100 to file as a small plan.

Yes, it is that time of year again – the annual tax lament, to the tune of “Yesterday” by the Beatles. Remember, it is only when the final line is truly sung from the heart that one can appreciate the scope of anguish and angst that the artist is attempting to convey… Yesterday... Income tax was due, I had to pay... All the funds I tried to hide away... I don't believe, I'll eat 'till May. Suddenly... I'm not sure that I am fiscally... Ready for responsibility... Oh yesterday, came suddenly. Why, I Owed so much, I don't know, I couldn't say May be Forms were wrong, how I long, for yesterday. Yesterday... Seemed like prison time was on its way... Now I need a place to hide away... While keeping IRS at bay. Why, I Owed so much, I don't know, I couldn't say May be Forms were wrong, how I long, for yesterday. Yesterday... Taxes due, I filed come what may... Losing all deductions that's my way... Of giving IRS my pay. mm - mm - mm - mm - mm - mm - mm.

Just curious, is the advisor's name either McFly or Brown?