Section 1.414(s)-1©(3) of the IRS regulations allows "reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses and welfare benefits" to be subtracted from 414(s) compensation.

Does this include the taxable portion of section 129 dependent care benefits, which would be included in W-2 compensation if in excess of $5,000? Would these be a "fringe benefit" or a "welfare benefit"?

I am looking for comments on when FICA taxes are payable if a bonus is earned in the current year but paid in the following year with the 2 1/2 month window.

Example: 100 dollar bonus vests (no risk of forfeiture) on 12/31 but is not paid by the company until March 3rd of the following year. A participant elects to defer $50 of the bonus into the nonqualified deferred compensation plan and receive the remaining $50 dollars in cash. Are FICA taxes on the $50 deferred in the plan payable on 12/31 versus March 3rd?

401k Plan is under audit for late contributions ( we think). DOL has requested 2007 information as part of the examination. The 2007 form 5500 was filed 08/01/2008 and the audit is not scheduled until late Sept.

Does 3 year SOL apply here or can the DOL request whatever they want?. Any input appreciated

A plan has normal retirement age of 65 and an early retirement age of 55. Participant has 10+ YOP. To determine the age 55 maximum 415 $ limit, will the calculation be (a) or (b) below.

(a) 195,000 * age 65 a.p.r. / age 55 a.p.r. * (1+i)^-10

(b) 195,000 * age 62 a.p.r. / age 55 a.p.r. * (1+i)^-7

In the past I have had plans with normal retirement age 55 and the adjustment is from age 62, but the confusion in this case comes from the fact that the normal retirement age is 65.

All plan assets in a VS DB plan have been paid out prior to the end of the last plan year. There is a Form 5310, Application for Determination for Terminating Plan, that is pending with the IRS. Can the plan administrator check the final return/report box in Part I, line B at the top of the Form 5500 while the 5310 application is pending? Or must another 5500 be filed for the plan year in which the IRS completes the review of the 5310 application?

A DB plans has a minimum required contribution, but plan sponsor has no income (Sch C).

This is a owner only (1 person) with no employee.

What are the options?

If the SB shows funding deficiency, is there an excise tax?

The way I read the definition of Electronic Data Interchange, those standards apply to computer-to-computer interactions - no human intervention is required to process the message... so, if we email an excel eligibility file to a vendor who then has to upload the information to its system, a human interaction has occured and the EDI standards do not apply? Am I on the right track here?

For 280G valuation purposes, let's assume restricted shares vest on the closing date of change in control, but participants are entitled to elect cash, stock or cash/stock combination of merger consideration for their vesting restricted shares.

Shares of Company ABC vest at value $X, but are then automatically exchanged for merger consideration valued at higher value $Y.

Which value do you use for (i) W-2 reporting, and (ii) purposes of Q/A 24© calculations? $X? $Y?

It seems reasonable to use value $X for W-2 reporting but if the participant is guaranteed a higher economic value of $Y for the shares, then for 280G purposes it seems reasonable and conservative to use the higher value of $Y.

Thoughts?

For 280G valuation purposes, let's assume restricted shares vest on the closing date of change in control, but participants are entitled to elect cash, stock or cash/stock combination of merger consideration for their vesting restricted shares.

Shares of Company ABC vest at value $X, but are then automatically exchanged for merger consideration valued at higher value $Y.

Which value do you use for (i) W-2 reporting, and (ii) purposes of Q/A 24© calculations? $X? $Y?

It seems reasonable to use value $X for W-2 reporting but if the participant is guaranteed a higher economic value of $Y for the shares, then for 280G purposes it seems reasonable and conservative to use the higher value of $Y.

Thoughts?

When you open an IRA account you have to complete a Roth/Traditional plan agreement, right?

What if you don't ever return it to the financial institution? On the institutions side, what due diligence do they have to make sure it is returned? Can they return your funds if say after a year you never return the plan agreement? Is there any reporting for that since they have held your funds for so long?

We are submitting a DB for a letter of determination upon termination. The plan was established in 1967 and they have used volume submitter plans as far back as I can tell. Line 3c of Form 5310 asks "has the plan ever received a letter of determination". The plan has the letters for the volume submitter plans but not a specific letter for the plan. In this context will the IRS accept the volume submitter letter as a letter of determination for the plan? Otherwise Line 3c instructions say you have to go all the way back to either the original document or the last time the plan ever received a letter of determination and submit all subsequent amendments and restatements which may not be available. Would a VCP filing be the appropriate course of action in this case? I know our records only go back about 10 years or so on this plan.

Aside from contractual and HIPAA , what legal obligations do TPA's have to protect confidential employee information, such as financial information .

I'm confused, which is not unusual. A company with a safe harbor plan has been acquired and the safe harbor plan will merge into the acquiring company's plan in September. For the period from January 1 through August 31, the plan operated as a safe harbor plan and all contributions were made. The plan will terminated effective August 31st. Do they need an ADP/ACP test for the short plan year? Or is their safe harbor status effective through plan termination?

I have a plan that wants to terminate. The plan does not offer lump sums... the plan sponsor wants to purchase deferred annuities for all participants. Am I correct in thinking that the annuities must include all rights and features as stated in the plan document?

Which extension is everyone checking? Automatic or nothing? At first I thoguht Automatic, but that seems to relate to piggy backing off a corporate tax extension. The 8955-SSA FAQ's indicate that the special box should not be used, except for disasters, etc.

To qualify for exclusion pursuant to 132(d) (working condition fringe benefit) for pay-related education, is it necessary that the employer pay the educational institution directly, or is it permissible to reimburse the employee (and satisfy any substantiation requirement)?

I did a search on the board and found a few topics that come close to what I'm trying to figure out, but not quite there. I'm not at all familiar with SEPs I've read the different FAQs and pub 560 etc. Any help or guidance is greatly appreciated!

Here's the situation:

The client has a SEP plan (IRS model 5305). Client has filed an extension on his tax return, so the final 2010 contribution will be funded in Oct.

This client also adopted a new 401k plan effective 7/1/2010, no contributions were deposited to the 401k plan for 2010.

The IRS FAQ's regarding SEP's stated that a SEP can't be established if they have a QP already. Can this client set up a 401k plan after they have set up the SEP plan? Is the contribution to the SEP valid or should the contributions be deposited to the 401k plan for 2010?

Next question: In 2011, the client rolls his SEP plan into the 401k plan - if the 401k document allows, would this be permitted. Would you need to terminate the SEP plan.

No other employees have met the eligibility for either plan.

A 401(k) Plan has an in-service distribution option at 59-1/2. HCE receives an in-service distribution during 2010 and is only age 57. Sources distributed are 401(k), Safe Harbor QNEC, and Profit Sharing (non elective contribution). The distribution was rolled over to an IRA and then converted to a Roth.

Any thoughts on how this can be corrected? I have looked at Rev Proc 2008-50 and do not see this situation.

Many thanks in advance for thoughts.

This is a typical missed contribution scenario with a twist. An employee had an election on file, but it wasn't honored by the employer for several months because the benefits department did not receive it. Employee noticed this and contacted the benefits department. Benefits department told employee they had no election on file.

Employee, with this knowledge, waits several months to inform the benefits department that she should have an election on file. At that point, the election is found and implemented.

I know that the employer will have to correct for the first period (50% deferral plus 100% match), but what about the period where employee had demonstratable, actual knowledge of the error and did nothing to correct? Is the correction the same for this period?

Thanks for all responses.

We have a participant who submitted, as part of her dependent daycare claim, the cost of a webcam that the daycare provider offers so that the parent can "see" the child during the work day.

Does anyone think this is part of the permitted dependent daycare expenses, or is it a very nice add on that cannot be pretaxed?

Thanks.