I have found a number of conflicting answers to this question: An S-Corp has 6 owners, only 3 of which are employees. There are no other employees beyond the 3 employers. Can they file on the 5500 EZ?

Are expenses for the Sylvan Learning Center considered qualified expenses under the child & dependent care plan of a flexible/cafeteria plan? (Based on IRS publication 503?)

Can a Profit Sharing Plan participant purchase a Condominium and collect rental income as investment gains to the Plan? The plan offers segregated particiant investment accounts (all directed investments-no trustee direction)?

What issues are involved??

Thanks

Please bear with me as I have only been doing this for about 6 months. If someone has elected to participate in a Health FSA for say $1,000 annually to cover unreimbursed medical and dental for him/herself can they change the amount of the election if they have a status change such as marriage, divorce, birth etc? I didn't think so since this would essentially allow them an open enrollment but I've seen some information that might conflict with this. Any help would be most appreciated as I have new enrollees asking.

Thanks!

An employee has a son who is 20 years old. This young man is not in college but is actively involved in a church/missionary work on a volunteer basis. He receives informal training for this work, but the training is not through any school, accredited or otherwise. Currently, this 20 year old son is supported by his parents.

Broad Issue: What is the criteria for a "dependent"?

Sub-Issues:

1) Is this young man still considered a dependent ?

2)Can this young man stay on his parent's health coverage until age 21?

3)Should this young man be on COBRA at this time.

We inherited a new client in 2002 who has an existing SARSEP. They adopted a new Profit sharing plan at the end of 2002, presumebly to fund it with an employer contribution. I don't know to much about SARSEPs, but can the following occur.

Assume the prototype document allows for the adoption of a qualified plan in the same year. Also, no employer contribution has gone to the SEP. Assume they are TH.

Can they simply fund the Profit Sharing for 2002 to include those who were eligible under the SARSEP and not fund the SEP?

If so, I assume they can use permitted disparity under the Profit Sharing plan?

Anything else come to mind would be appreciated..

Employees of schools, hospitals, etc., with 15 years of service can contribute up to an extra $3,000 each year (to a max of $15,000) to a 403(B) account. However, this catch-up is not available if the employee's prior elective deferrals exceed $5,000 times years of service. Before EGTRRA, prior elective deferrals included contributions to a 457 plan. S. 457©(2)(B) was repealed effective in 2002.

For 2002 and later, should the computation of prior elective deferrals include 457 contributions made before 2002? Or are they entirely ignored? In some cases, dropping the 457 contributions will make the employee newly eligible for the 402(g)(7) catch-up.

Owner has wife on payroll in company with old SAR SEP plan. The ADP for the NHCE group is 2%. How are the owner and his wife computed for the test. His w-2 is 80,000 and hers is 10,000.

Also what if their 2 kids are eligible and also on the payroll and each of the kids make $5,000. How is that factored into the test ?

PS where can you find data on this family attribution area ??

Special Situation: An employee has medical insurance premiums through a third party provider and pays premiums quarterly directly to provider. We just instituted new FSP and know that premiums are not eligible for reimbursement. Question- may this employee pay the premiums monthly via salary reduction (pre-tax) and we (employer) submit payment direcly each quarter to the provider? Thanks for your help.

we have a client that is asking advice on his DB plan. He is a sole proprietor (100% owner) of a psychology practice and has a DB plan in place. He wants to purchase a nursing home with plan assets. He would be 100% owner of that, too. Is this permissable? and if it is , does this create a control group or common control situation where he needs to cover ee's of the nursing home? or would the nursing home just be an asset of the plan?

thanks for any help...

An EE terminates service with ER A and goes to work for unrelated ER B. He wants to transfer the loan he had under ER A's plan to ER B's plan. ER B's plan does permit transfers prior to meeting the eligibility requirements and does permit loans. Since a loan is an asset of the plan, I'm thinking this could work. Am I missing anything?

401(k) plan document is written to permit all employees to participate. In actual operation the employer has been excluding (for 3 years) collectively bargained employees and those employees who they consider to be part-time (no year of service for eligibility).

Since the intent was never to include the CBA ees, there is no evidence the CBA ees bargained for the 401(k), no communication was given to the CBA ees that they were eligible to participate in the plan, they are a statutory exclusion and tested separately for 410 and ADP/ACP anyway - would the employer have to make the corrective contributions under 2002-47 or do you think the employer could amend their plan now to exclude these ees and not have to make the corrective contributions/earnings? Advise VCP or a PLR?

Seems like there isn't any justification for excluding the part-time ees and corrections must be made and amend the plan prospectively to add the YoS.

Trying to give the employer (and counsel) alternatives they could consider rather just state corrective contributions required under 2002-47.

What is the procedure to involuntary distributions of lost participants?

What about plan terminations, where the participant is missing with a balance greater than $5,000?

Thank you

For an employer that sponsors two 457(B) plans, is it legal to have a different normal retirement age in each plan? Someone told me they thought the proposed regulations require consistency, which makes sense.

To add a twist, what if the employer is a state university? The university sponsors its own 457(B) plan, and the state sponsors another 457(B) plan. University employees may contribute to either or both plans.

Thanks,

Ken Davis

Univ. of South Alabama

Does an employee have to be enrolled in one of the employers group health plans (medical, dental) to be eligible to participate in the FSA Plan?

A doctor has recommended that spouse should use hot tub to alleviate back pain. Can the employee submit this expense under the FSA plan. If this can be done under "Capital expenses" as noted in IRS Publication 502, what back up would have to be submitted to the administrator to reimburse this claim. And, If an appraisal is not receive before FSA elections are due, 12/31, can the current election be adjusted once appriasal is received?

Can a SIMPLE that was started Nov 2001 (which I believe now satisifes the 2 year rule) be rolled over to a 401-k without penalty, problems, etc.

If the plan is zeroed out in May, 2003, the 5500 filing deadline will be 12/31/2003, regardless of whether the plan is zeroed on May 1 or May 30.

text added:

whoops! this was supposed to be a reply to a previous post!

In overfunded DB plan for Public Employees, where surplus would be used (partially) to fund COLA increase for retirees' health insurance coverage, could COLA be made retroactive? If so, what hoops to jump through? (For ex: Any maximum number of prior years for which COLA could be given?)

I have a health plan funded by a VEBA

Is Sch P of Form 5500 needed to start statute of limitations?

Chart in Form 5500 instructions only shows the P necessary for pension plans