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The owner will deduct his/her pension contribution on the Schedule 1 Form 1040 line 16.

Nope.

Haha I know you can handle it! Not sure if I told you, but it took me a while to figure out who "Bri" was and that he (not she as I thought) actually worked with me. But I was always impressed with your comments lol. You're one of the current and future Benefitslink stars! That's good because lots of the old ones are gone or getting quiet these days. But not all of them.....

EBECatty, I agree completely with Peter's comments. I would also point out that the Mark O'Donnell IRS memorandum giving guidance to DL request reviewers for governmental plans (which is, of course, only soft guidance), set forth (somewhat arbitrarily) certain safe harbor vesting schedules for governmental plans, and therefore had to, at least obliquely, address what years of service needed to be counted. Although not the subject of the memo, the formulation chosen implies that pre-eligibility service would not need to be counted for purposes of compliance with the Internal Revenue Code's requirement that a governmental qualified retirement plan satisfy the pre-ERISA vesting rules. For example: "(service can be based on years of employment, years of participation, or other creditable years of service)." The full memo can be found here: https://www.irs.gov/pub/irs-tege/directive_vesting_043012.pdf. Of course, the plan document or state law could differ, as Peter points out, and it might or might not be possible under state law to impose a change on employees hired before the date of the change.

The EOB has a fair amount of discussion about a mistake of fact that includes some tenuous references to sources. The discussion most on point with this thread says: "1.b. Tentative contribution for employee who fails to accrue benefit for plan year is not subject to return under mistake of fact. The Joint Committee on Employee Benefits of the American Bar Association posed this question to the IRS in an informal technical session conducted in 2001. Suppose an employer, for budgetary reasons, deposits monthly to the accounts of participants in a 401(k) profit sharing plan. It is determined after the close of the plan year that some participants don’t qualify for the contribution because they fail to satisfy the plan’s last day employment requirement. May the funds revert to the employer? The IRS’s response was that the funds could not revert to the employer because the IRS doesn’t view estimates as a mistake of fact." Looking collectively at the various sources that dealt with mistake of fact situations, it seems the IRS says "we will recognize it when we see it, and we will let you know if we see it."

I am confused by which years and what maximum(s) you are asking about. Absent an unexpected clarification, I agree with justanotheradmin.

After tax contributions are employee contributions and unrelated to the business entity. Deadlines are the same.

If I may add a couple of points -- An unfunded church plan that doesn't meet the criteria for a section 457(b) eligible deferred compensation plan is subject to IRC §457(f). Deferred compensation is then included in taxable income when the right to the compensation is no longer subject to a substantial risk of forfeiture. Earnings credited after vesting are taxable when actually or constructively received. Church plans are not exempt from IRC §409A, which imposes significant restrictions on plan design and severe penalties for violations. It is therefore important to consult knowledgeable counsel before adopting an unfunded plan.

See 1.401(l)-2(d)(5) (the 401(l) is an "L"). https://www.law.cornell.edu/cfr/text/26/1.401(l)-2 It looks like you calculate the amount of the integration level using the 80% SSTWB + $1 (see 1.401(l)-2(d)(3) which has a maximum excess allowance of 54%. The integration level is pro-rated over the number of months (which I understand includes the partial month) in the short plan year. This is your calculation to get to $90,780.71. The last sentence in 1.401(l)-2(d)(5) says "No adjustment to the maximum excess allowance is required as a result of the application of this paragraph (d)(5), other than any adjustment already required under paragraph (d)(4) of this section."

"The Employer retains the right to reduce or suspend the safe harbor nonelective contribution under the Plan. If the Employer chooses to do so, you will receive a supplemental notice explaining the reduction or suspension of the safe harbor nonelective contribution at least 30 days before the change is effective. The Employer will contribute any safe harbor nonelective contribution you have earned up to that point. At this time, the Employer has no such intention to suspend or reduce the safe harbor nonelective contribution." That's what our Corbel/Relius notice says. So it seems clear to me you can do it.

Jakyasar: The statute defined "real estate agents" and "direct seller". The people who work for a broker in any other capacity are almost certainly employees. That would include the secretarial staff and a marketing manager who is not compensated as set forth in the statute. There are people who work for brokers that handle advertising and marketing materials like VistaPrint Booklets Brochures Business Cards Forms Checks Door Hangers Flyers Gift Card Holders Key Card Holders Magnets Table Tents Packaging Insert Cards Custom Postcards Presentation Folders Whose job is it to make decisions about the employment status of someone like this? A Plan Sponsor is at risk if he/she makes the wrong choice. "Employees" get 7.65% employer contributions to FICA and Medicare, the same health insurance and pension benefits as the other "employees", Worker's Comp coverage, sick leave and annual leave and all of the other fringe benefits. Independent contractors get none of them. Realtors tell you that the R in their logo stands for "Republican". That that may provide understanding of how section3508 came to be enacted during the Presidency or Ronald Reagan.

The operational error of miscalculated overtime pay started in 2021, so that is going to drive the determination of available correction methods for the entire sequence of MDOs. The back pay on 10/20/2023 was a correction of the previously unpaid compensation. The notice was due within 45 days of starting correct deferrals which it sounds like overtime was calculated correctly going forward from 10/20/2023. That should have started the 45 day notice period. You are the service provider and not the plan sponsor. I can't see arguing that the 45 day notice period starts when the service provider learned about the issue. Note, the 45 day time period does not by itself excuse the need for a QNEC. SECURE 2.0 section 305 and Notice 2023-43 liberalized the time frames for self-correction of Eligible Inadvertent Failures which the plan will have to determine whether this failure meets the criteria for being an EIF. One of the criteria considers the number of participants that are affected (either by count or percent of the population). Consider taking a closer look at Notice 2023-43 to see if the facts of the situation could justify self-correction. There may be an argument for using a 25% QNEC versus a 50% QNEC. Fortunately, there is no match involved.

Beyond considering whatever is the before-1974 Federal tax law about vesting: You’ll want to consider whether: (1) the Contracts Clause of the US Constitution [U.S. Const. art. I, § 10], (2) a similar clause of the State’s constitution, or (3) the State constitution’s provision about retirement-plan rights (if any) precludes the change. States’ courts differ widely in how they interpret constitutional provisions of these kinds. That includes differences about when a right against change attaches. Under some provisions and interpretations, a right against change attaches as soon as the employee first became eligible for the retirement plan. The analysis turns on the exact texts of the constitutional provisions and the interpretations the State’s courts have found or would find.

Your question is not clear, are you asking when does the deferred compensation become taxable and subject to income tax withholding rules or when the actual tax on the income is due? If it's the former, the income is taxable as compensation when it is paid or otherwise made available to the recipient, which is the 6 month delay date, and subject to withholding at that time. If it's the latter, the tax is due on the recipient's tax return due date as the amount is contingent upon the person's total tax situation.

If a governmental plan seeks to tax-qualify under Internal Revenue Code § 401(a), one considers nondiscrimination and vesting standards as in effect before September 2, 1974. To get into the details, use Carol V. Calhoun, Cynthia L. Moore & Keith Brainard, Governmental Plans Answer Book (Wolters Kluwer 5th ed., updated December 19, 2023), https://law-store.wolterskluwer.com/s/product/governmental-plans-answer-book-pension3-mo-subvitallaw-3r/01t0f00000J4aDTAAZ. Whether service may, must, or must not be counted turns on State law and, if permitted regarding a local government employer’s plan, further local law. Consider that a governmental plan often is not expressed in one fully integrated writing that looks like what pension practitioners call a plan document. Rather, a plan might be stated by some combination of a legislature’s statutes, executive agencies’ (including a retirement system’s) rules and subrule guidance documents, and courts’ interpretations of those law sources.

This is correct. If you're looking for it in the 1099-R instructions, it's under the heading "Qualified rollover contributions as defined in section 408A(e)."