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I'm not a CPA but form the company tax standpoint whatever will go on the W-2 will be what is deducted either as wages or contributions on the corporate tax return. Assuming you are now doing refunds instead of a QNEC to pass, the participants will receive 1099-Rs from the Plan for their refunds and that will have no impact on the corporate tax returns.

We had a client with the same issue.... failed to file 11 years of 5500s for a 401(k)/PS but only had 8 years of information/data. Filed the plan under DFVCP, paid $4,000 per plan cap. We had discussions with the DOL because of the lack of data for the missing 3 years and were able to simply upload the incomplete 5500s (filing out primarily lines 1-4, marking a few of the boxes below that, with no schedules) with a letter of explanation, including the DFVCP case number and agent in charge, etc. DOL accepted it, never heard anything from the IRS. This was just one client's experience, it may or may not work for another.

Remember how often BenefitsLink neighbors incant RTFD. Consider all documents governing the plan and its trusts. What does each document say about what ends a trusteeship? What does each document say about how a named fiduciary appoints a successor trustee, or an additional trustee? Was all that done? Consider all agreements and other documents with each investment provider. And with each service provider. What does each document say about an obligation to give a party, and perhaps third persons, notice of a change in a trusteeship? Was all that done? If careful readings don’t resolve all questions, consider ERISA (if ERISA governs the plan). If there is a question unanswered by the documents and the statute’s text, consider the Federal common law of ERISA. If the Federal common law of ERISA applies or is relevant to help interpret the statute, consider the American Law Institute’s Restatement of Trusts as an expression of common law. Evaluate carefully whether the recent appointment was of a successor trustee, or of an additional trustee. Consider whether the successor or additional trustee should request that the deceased trustee's personal representative submit an accounting for whatever the decedent did since his most recent accounting. Consider whether the successor or additional trustee should request that the deceased trustee’s personal representative deliver all trust records the personal representative possesses or could possess. Consider whether the successor or additional trustee should request that the deceased trustee’s personal representative confirm in writing that the representation has not done anything to administer the trust. Even if all of what was done was correct under the plan’s and its trust’s governing documents and applicable law, consider redocumenting the changes in the trusteeships. Why? An investment or service provider’s employee might lack discretion to allow anything beyond what a checklist tells the employee to do. This is not advice to anyone.

Having contemporaneous documentation of the change in trustee is a good idea for those uncommon times when a financial institution digs in their heels and refuses to do something until the name of the trustee on the account is changed formally. This is particularly true when there is only one named trustee on the account. I have had financial institutions refuse to close an account when assets were moving to another institution simply because the name of a former trustee was on the account and the financial institution insisted on getting signatures from all of the named trustees. This type of demand disrupted an otherwise well-planned transition of assets.

Keep in mind that by the time a recordkeeper sees a deferral, that deferral already has been processed by payroll. A recordkeeper can only react to whether payroll has applied the catch-up rule correctly. Generally, payroll for self-employed individuals is run separately from payroll for common law employees. The self-employed payroll commonly pays a draw and processes some deductions for fringe benefits or insurance, but does not apply payroll taxes. The self-employed individuals are responsible for making estimated tax payments directly with the IRS or through their tax accountants. It is not uncommon for a payroll interface file sent to the recordkeeper to combine the two separate payroll runs into a single file. If either payroll or the recordkeeper keeps an indicator for self-employed individuals, the indicator will need to be able more sophisticated than just a "yes/no" indicator. For example, the recordkeeper will need to be able to discern when an employee changed between being a common law employee and a self-employed employee in the prior year, or need to know how much compensation in the prior was FICA wages and how much was self-employment income. Maintenance of an indicator likely will fall on the employer, regardless whether the indicator is in the payroll system or the recordkeeping system. I expect when these provisions go live, a full-contact game of hot potato will break out between payroll and the recordkeeper with each side saying "it's your job, not mine."

@Peter Gulia Who does the admin on the plan? If there is a TPA involved, they would most likely be able to make that determination. We are already working on this determination for our clients. Our RK system does not have the self-employed indicator (as far as i know), but our testing/admin system does.

I have never seen an indicator like that, but I imagine they could build one if needed. But I would argue it is not needed if the context of your question is solely regarding the mandatory Roth catch-up provisions. All the recordkeepers I have spoken with have indicated they will build a new code which flags the required Roth catch-up individuals. The employer is responsible to provide a list to the recordkeeper of participants who earned in excess of $145k (indexed) in FICA wages. Therefore, a partner should not be on that upload list if she did not earn +$145k in FICA wages, eliminating the need for any sort of cross check. I don't think this should be happening, there is no need to look at total wages for a suggestion of who may be over the FICA wage limit. The employer should go straight to the source, find actual FICA wages and provide that list to the recordkeeper and payroll provider (unless the payroll provider can figure that out on their own).

Good point. You CAN do it, but that doesn't mean that you should. FWIW, Im adding Roth and IPRR to all plans that allow catch-up.