Jump to content

    Is the salary included for 6% limit?

    By Jakyasar,


    Sorry if was asked before.

    DB/DC plan combo, covering 2 owners only (no PBGC). Each has 100k of salary

    DC plan has 401k and PS provisions only - no SH match

    Owner Joe has deferral and PS

    Owner Mary has only deferral and no PS

    What salaries are included to determine the maximum 6% PS deduction?

    Assume DB contribution is 500k so will never satisfy 31% rule.


    401k Contributions Guidance for Two-Member LLC

    By ill,

    We established an LLC at the beginning of this year, with just two members – my spouse and myself. We reside in a community property state and file our taxes jointly as a married couple.

    Throughout this year, we've utilized our LLC to carry out business activities. My spouse has been working on a separate project, having earned about $1k, while I undertook contract work in the IT field, earning roughly $200k.

    Both of us were actively involved in the LLC's operations, each contributing more than 500 hours of work (met material participation test). However, we've encountered conflicting information regarding the tax filing status for our LLC and contributions to our 401k plans. 

    Can we both contribute to the maximum allowable amount for our 401k plans, which is $66k each, or is my spouse only allowed to contribute $1k, reflecting their earned income?

    Startup Tax Savers Credit for small plans - which year?

    By TPApril,

    401k Safe Harbor Plan is effective 1/1/22.

    Plan deposits 2022 Safe Harbor in 2023.

    Plan pays fee for 2022 in 2023.

    Understanding that the 2022 contribution applies to 2022 taxes, I think the fee paid in 2023 applies to the 2023 taxes, but wasn't sure.

    I'm even more confused about which year the Contribution credit for the safe harbor would apply to - 2022 or 2023 taxes?

    retroactive defined benefit plan and 5500 Filing

    By Rai123,

    We're a bit confused on how the 5500 filings work for a retroactive plan.

    Background: We created a Defined Benefit Plan for 2021 by the clients corp due date in 2022. We're now working on the 5500 Tax Forms for the plan for 2021 and 2022. Please note we use Relius Gov't Forms.

    Question 1: Our understanding is we will need to do two separate forms using the 2022 5500 SF. One for 2021 and check off the retroactive option on the SF. However do we enter 1/1/2021-12/31/2021 as the plan year for this form? (this is what we do when we're using a prior year form to complete a final tax form so it makes sense).

    Question 2: the instructions are a bit confusing because they state that the prior year SB (2021) must be attached as an external attachment as well as the 2022 SB. Does this mean we should only complete one tax form and carry forward to the ending balance as of 12/31/2022. In other words do one tax form for 2022 mark off the retroactive box attach the 2021 SB as an external attachment and the 2022 SB. However, the 5500 SF would have a zero beginning balance and include all contributions for both years and ending balance as of 12/31/2022 (hope that maks sense :)) if this is correct, please ignore question one!

    LTPT entry date

    By legort69,

    Our plan eligibility computation period is anniversary/plan year.


    • Calendar plan year
    • Normal entry is 1000/12: Monthly entry
    • Over age 21

    For LTPT entry with 500-999 hours / 12 months over 2 or 3 consecutive years.

    When will the plan entry date not be January 1 of the following year that the employee met the requirements?








    Unnecessary H&W 5500s

    By Griswold,

    Company has always been under 100 participants but has been filing 5500s for its H&W plan. Now saying that its broker filed those in error and doesn't have a wrap plan in place. Should they correct the 5500s even though they didn't have to file in the first place?

    Timing of deposits

    By 52626,

    Client deposits deferrals/loan payments on their payroll date. This means deferrals are funded in one day

    Plan will migrate to Empower ( formally Prudential) on 10/20

    First payroll to be sent to Empower is 10/27

    Issue - once the file is received, Empower will have a call with the client about the process to review and approve the file. This call will not take place until the file is received. Furthermore scheduling this call is first come first serve, so there is no idea when the first deposit can be funded.

    Client is concerned the deposit will be 3 - 10 days later than the normal deposit date.

    Client stated their auditors will flag the deposits as late

    Question - Is there anything in the IRS/DOL guidance that grants a grace period for unusual circumstances?

    Our client is a former auditor and she feels the deposits will be deemed late.

    any thoughts?

    IRA transfer from 401(k) Plan when participant can't be found

    By rblum50,

    I have a terminated 401(k) that I am trying to remove all of the participants monies from before the end of this year. Several of the participants can't be located and/or won't return the distribution paperwork to the plan sponsor. It's my impression that the plan sponsor can establish individual IRA's for each of these individual's so that their monies can be removed from the plan trust and we can terminate the trust before the end of this year. Question: does anyone know of a financial institution that would establish individual IRA's without the participants signature?


    Mortality Table for Funding

    By DavidO,

    Plan Year: 7/1/22 - 6/30/23
    Stability Period: Plan Year
    Assume 100% LS for Funding
    EOY Valuation

    Using the annuity substitution rule for 430 funding, which 417(e) Applicable Mortality table should be used when valuing the LS? 2022 or 2023?

    1.430(d)-1(f)(4)(iii)(B) says to use "the current applicable mortality table under section 417(e)(3) that would apply to a distribution with an annuity starting date occurring on the valuation date".

    Thanks for any help with this!

    Auto Enrollment Trends

    By TPApril,

    I'm just curious the trends for auto enrollment between ACA, EACA and QACA? Are there many participants that take permissible withdrawals?

    New Cash Balance for recently sold company

    By Hojo,

    I have a company that just went through an asset sale that included the former employees.  As of 9/1 there is only the owner left as an employee and he has income coming into the employer for the next few years.  Would there be an issue starting a new CB plan effective 10/1/2023 with a short plan year and only covering the owner?

    I feel like I'm missing something, but I'm not sure.

    The 401(a)(17) Contribution Limit and Multiple Employers

    By ERISA-Bubs,

    We have a 401(k) Plan in which several related (i.e. same controlled group) employers participate.  An employee doesn't receive compensation in excess of the 401(a)(17) limit from any single employer in the Plan, but does have combined compensation in excess of the 401(a)(17) limit based on compensation received from the related employers.

    I know the 401(a)(17) limit is not combined (but rather a separate limit for each employer) if we are dealing with a multiemployer or a multiple employer plan (see Treas. Reg. Section 1.401(a)(17)-1(b)(4)). 

    Since this participant is receiving combined compensation in excess of the limit from employers in the same controlled group, does that make a difference?  Can we look at compensation from each related employer separately, or do we have to look at combined compensation from all related employers?

    Thank you.

    Form 7004

    By Egold,

    Is it necessary to include extension form with 1120?

    1120 not filed electronically

    Employee Notification of Being Bought?

    By Bcompliance2003,

    Few questions regarding employee benefits during an M&A

    1. Does an Employer have to provide advance notice to its employees telling them the company is being sold?

    2. The benefits are planning to end on the day of the sale, 10/2/23; when does the seller's benefits end?  Would it be 10/2/23 or 10/31/2023 since their premiums for October are already paid for the month?

    3. The plan is to allow the seller's employees enroll into the buyers plan retroactive to the date of the sale (10/2). However, the employees won’t be officially onboarded yet as they will need to go through the full hiring process such as completing payroll docs, I-9s, etc.  Because the seller’s benefits will end on the date of the sale, our client doesn’t want to wait until the onboarding process is complete to offer benefits.  Could this be an issue?

    4. If the benefits under the seller don’t end until 10/31/2023, any potential issues if the buyer is the owner of the employees as of 10/2/2023?

    Discontinuing a SH Match and impact on Vesting

    By justatester,

    Plan discontinued SH match in April of 2020 due to business hardship from Covid.  Never amended the plan to remove SH for 2020, 2021 or 2022.  Restarted match in May of 2022.  Plan filed a VCP to retro amend plan out of SH status for 2020-2022.  It was approved.  

    How does this impact vesting?  The SH Match is 100% vested and the regular match has a 5 year schedule.  Is the match that was originally deposited as a "SH Match" considered fully vested under SH rules or no since the plan was "amended" to be Non-SH?  If deemed to be non-safe harbor could the also retro amend to make the match 100% vested?


    Gag Clause Attestation and Changing Coverage

    By EBECatty,

    I can't seem to find any guidance on filing the attestations where the carrier or method of funding has changed since 2020.

    For example, a plan was self-insured from 2020 through 2022, then became fully insured in 2023. The fully insured carrier's attestation would not cover (in reality, even if it does on paper) the plan's compliance for 2020, 2021, and 2022 when it was self-funded. In that case, if the self-funded TPA is not filing the attestation for the plan sponsor for years before 2023 (as some are not) would the plan sponsor file an additional attestation on its own?

    Presumably similar circumstances will continue to arise for non-calendar year plans that change carriers/funding methods.

    Would appreciate any insight.

    Am I do this right? (using 401k calculator for missed payments)

    By 401krepays,

    I'm using https://www.askebsa.dol.gov/vfcpcalculator/

    Please correct me if I'm doing this wrong. First one on 04/15/2022 is when they took 99.61 out of the persons check and had a match which was also amounted in 99.61 which equals = 199.22)  The company then paid 199.22 into the 401k account on 8/30/2023 and the final payment shows in adp it went through on 8/30/2023. Please see attached screen shot.


    Edit: what is the difference between Recovery Date and Final? I did read the instructions but need this dumb downed for me.

    Screenshot_2023-09-21 VFCP Calculator.png

    ACP Carve out method

    By MGOAdmin,

    I am new to 403(b) testing.

    Can a 403(b) run the ACP test uy excluding all employees that would not have met a Age 21, 1 year with dual entry eligibility? Like we do for 401(k) ADP/ACP testing?

    Delinquent or not? 5500-EZ

    By bjuneure,

    Individual 401K Profit sharing plan that was managed by a financial advisor for 10 years. She is deceased and I have no records of filed 5500-EZ forms. I am in the process of preparing historical returns for the past 12 years under the penalty relief program:

    1 - Is there any way to determine if 5500-EZ forms have already been filed?

    2 - If not, what is the risk of duplicate returns that should be similar but, if she did file, she may have used cash basis rather than my preferred accural method.

    Thank you for any advice.

    IRS extends tax filing deadline for Hurricane Idalia victims in Florida

Portal by DevFuse · Based on IP.Board Portal by IPS
  • Create New...