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And the daylight hours start s l o w l y getting longer again. Woohoo!

Nothing. It's just another term to describe it, though I usually hear it described as "a mega back door roth" The "mega" is in reference to being able to essentially make a ROTH contribution equal to the 415c limit through VAT and immediate conversion to ROTH instead of the non-mega? IRA limit you could get by contributing the IRA limit and converting that to ROTH (assumes you don't have pro-ration problem with other taxable IRAs)

Fundamental point: a cash balance plan is NOT a type of plan (ala DB, PS, MP), it is a type of DB formula. Thus, you have a DB plan where you are going to change the formula. It is not a plan termination, just a type of formula change.

Yes, the WSJ had a rather extended article on this and how the tax benefits could be a major reason for the structure. It was an interesting read.

Some recent news stories about Shohei Ohtani’s contract with the Los Angeles Dodgers remark on its deferred payments in 2034-2043. Those payments might be “retirement income” within 4 U.S.C. § 114(b)(1)(I)(i)(II). That might mean California cannot tax those payments if Ohtani then is no longer California’s resident. Further opportunities might be available if Ohtani no longer is a US resident at a relevant time.

I know NYS taxes (or used to) NY-source NQDC if it is paid to a non-resident over a period less than 10 years, the threshold for qualifying as "retirement" income to which Peter alluded. I'm not sure if that is still the case, but knowing NYS would be surprised if it no longer applies. If so, I think the payer has a withholding requirement, which creates the compliance mechanism.

I don't think there has to be a minimum salary to be on the payroll and the one just needs to be an employee of the other, and really, I thought the criteria was either an employee or some involvement running the business - but being an employee and getting a W2 is likely an easier documentation.

The statute defines “retirement income”. That definition’s first eight subparagraphs refer to kinds of retirement plans, contracts, or accounts. Subparagraph (I) about nonqualified deferred compensation puts some restraint on which payments are treated as retirement income.

A Federal statute (4 U.S.C. § 114) restrains a State’s and political subdivisions’ income taxes on a nonresident’s retirement income. In the 1980s and early 1990s, several States assessed State income taxes on people who no longer resided or worked in the State. How? ‘The State provided you an exclusion from income when you lived or worked here and made your before-tax § 401(k), § 403(b), or § 457(b) contributions to those tax-deferred retirement plans. The State gets income tax to the extent your retirement payout is attributable to the accumulation from the exclusion we provided you.’ Often, this resulted, whether legally or practically, in “double taxation” because the State in which a retiree resided imposed its tax on retirement income, often with no credit for the working-years State’s income tax. Congress legislated a Federal supersedure, which applies to amounts received after December 31, 1995. 4 U.S.C. § 114 https://uscode.house.gov/view.xhtml?req=(title:4%20section:114%20edition:prelim)%20OR%20(granuleid:USC-prelim-title4-section114)&f=treesort&edition=prelim&num=0&jumpTo=true.

If she is a Virginia resident when she receives the distributions, then she will pay Virginia state income tax on her distributions. https://www.tax.virginia.gov/news/virginia-taxes-and-your-retirement For those who are curious about other states, visit: https://www.kiplinger.com/retirement/602202/taxes-in-retirement-how-all-50-states-tax-retirees

I wouldn't worry about a brief non-CG period. Also, Schedule SB is still used for multiple employer plans, you just need to do an SB for each employer. The MB is for multiemployer plans - a different animal. Very easy to force CG, put wife on husband's S-corp payroll, doesn't have to be material, she just needs to be an employee. I'm sure there are other easy ways as well, having husband somehow formally involved in wife's sole proprietorship. BUT - your administrative ease should not be the driving force (sorry) behind "to be (a CG) or not to be" question, it should be all the relevant issues/advantages/disadvantages with respect to their businesses and tax situations as discussed with their accountant (and attorney if necessary).

On what basis was vendor #2's deposit into the plan? They weren't reimbursing the plan for an expense it paid, partially or in total, because it was the employer that paid the expense. If the expense was paid by the plan and charged against accounts and then partially reimbursed, would that not have to be allocated back to participants? If the employer was reimbursing the plan for expenses the plan paid, and deducting as plan related administrative expenses then I think they would have to do that - they couldn't treat as contributions. Far be it from me to question a national vendor, but I didn't think that any plan-related party could just toss money into a plan and have it be used for whatever.

Correct. Yuck.

If they WANT to be a CG, have their atty use a method to make it happen. That can mean being involved in each other's business or using options, etc. You can force a CG.