I am finding conflicting advice as to whether Form 5558 e file is mandatory, if the Plan Sponsor otherwise has 10+ W-2's, 1099's etc that they file.  I realize that e file capability became a reality last year.  My question is, is e file mandatory when the Plan Sponsor has 10+ information returns that it files.  Thank you.

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If CODA provisions are added at this time to a large profit sharing plan that was originally effective in 2021, does it have to be an EACA or is it exempt from this requirement because the plan was initially effective prior to 2022?   Thanks in advance for any assistance.

I listened to a webinar today presented by a well-known industry expert. He made a comment about SECURE 2.0 Section 603 that surprised me. He made the comment that to simplify the administration of Roth catch-ups, a plan sponsor could amend the plan to only allow catch-ups in the form of Roth for everyone. I thought I must have misunderstood him because to me the proposed regs and final regs seem very clear that this is not allowed. However, when questioned, he commented that he believes the IRS will allow this and the third party document providers are preparing for this. 

Does he know something that no one else knows? Has anyone else heard rumors of the IRS taking this stance?

Thanks

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Hi all,

On reviewing a Plan Sponsor's payroll records/W-2s, I've identified that the owner's W-2 reflects total deferrals of $24.5k for 2025 (not catch-up eligible). Normally a 402(g) Excess distributions would be relatively straightforward, but in this case, the 'excess deferrals' weren't actually deposited in the Plan trust (to the tune of $5k, $19.5k actually deposited), which is why our system didn't flag the 402(g) Excess (as it would have on receipt). Let's say this was due to a missed off-cycle processed by the Plan Sponsor just for the owner to contribute these amounts.

Another complicating factor, is their payroll report indicates that they added back a positive after-tax deduction of $1k, labeled appearing to be in order to correct this, so the funds appear to have not actually been withheld from his paycheck, but the W-2 does reflect them as withheld.

In order to correct this, is the only acceptable method to fund the late deposit of the $5k EE deferrals then distribute them with accompanying 1099-R from the Plan Trust?

Is there any other permissible solutions that don't include funding the excess amount, such as correcting the W-2 or issuing a 1099-R (no accompanying payment) reporting the $1k excess as taxable for a pre-4/15 402(g) correction?

If the funds weren't actually withheld and the $1k excess was, in fact, paid to the individual, does any correction (other than possibly the W-2) need to take place at all?

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I think I know the answer but I wanted to check the following:

Existing 401k plan for a sole-prop.

The election for deferral amount had to be made by 12/31/2025 for 2025 as it cannot be done by 4/15/2026? After year end only applies for new plans.

Am I correct?

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I've been presented with this situation:
Two spouses own two S-corps -
MS owned by J 51% and her husband O 49%
OC owned 100% by O
It's a controlled group because O owns part of MS.

Each business has only one other employee, an NHCE.
OC has a 401k plan (I don't have any other details yet).

Of course, J wants a 401k plan to cover MS... and only MS.

I want to say that as long as the populations are stable, then this is OK.  No matter what feature I put into the MS plan, I'll either have:
1 HCE benefitting, 1 HCE nonbenefitting, 1 NHCE benefitting, and 1 NHCE nonbenefitting = 1/2 / 1/2= 100%
or
2 HCE benefitting, 2 NHCE benefitting = 2/2 / 2/2= 100%

This seems... simplistic?  Like I'm missing something?  What trap am I unwittingly walking into (other than the one where one of the NHCEs leaves and the testing fails and it's a disaster).

Thanks!

If participant died in 2020 and estate is beneficiary (subject to 5-year rule), CARES act said 2020 is ignored for purposes of 5-year rule. Is distribution due in 2026, or was it due in 2025?

Recordkeeper is arguing that we create a fiction that participant died in 2021, such that distribution is due in 2026.

I don't think that's what CARES Act said but it would be a good result if everyone here thinks recordkeeper is right!

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This is a profit sharing plan with spouse owners only.  Both are subject to the RMD.  Husband died January 2026. Wife is the primary beneficiary.  The Plan requires the RMD in year of death be based on the deceased date of birth and the beneficiary's DOB in the following years.

Does the wife have the option of waiving the 2026 RMD without penalty?  If she is eligible to waive, will she be subject to both 2026 and 2027 in 2027?

Due to the non-liquid nature of plan investments, I do not believe she will be able to roll the husbands benefit to an IRA at this time.

Thank for your help.

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Before IRAs’ custodial-account agreements next are amended (by December 31, 2027), those accounts will have been operated for about eight years with at least some in-operation provisions different than the ostensible written provisions.

How does an individual learn which provisions are real, and which are displaced by Internal Revenue Code and other law changes?

Remember, many, perhaps most, of an IRA’s tax-sensitive provisions call for an individual to administer her account. Often, a custodian is protected in following the account holder’s instructions.

Why does the IRS not allow an agreement to state provisions by referring to the Internal Revenue Code?

Any insight, articles, or other resources anyone can share that would address the following questions:  (1) Can different plans sponsored companies a part of the same controlled group stop offering coverage for weight loss medications?; (3) Can companies within the same controlled group decline to offer coverage for weight loss medications while others offer it?  Even if they participate in the same welfare plan? (3) Can a plan limit or exclude new to market weight loss medications (non injectables)?

I maintain HDHP family coverage that covers me, my 24-year-old daughter, and my husband. Coverage for my husband is secondary to Medicare (Medicare became primary in March of 2025). My 24-year-old daughter is a qualifying relative for 2025 and therefore I will claim her as a dependent on my 2025 tax return.

I contributed the full family contribution limit to my HSA for 2025 and plan to again for 2026. However, my husband's Medicare advisor recently told me that just because I have family coverage does not necessarily mean I can contribute the family contribution limit. If just my husband and I were in the HDHP, and he has coverage elsewhere (Medicare), my understanding is that I could only contribute the self-only limit. However, since my daughter is also covered, I was under the impression that I could contribute the family contribution limit.

I'm having trouble finding anything definitive that says whether a qualifying relative who is a child is treated differently from a dependent child (under age 19 or full-time student under 24) in this instance.

I'm hoping that @BrianGilmore in particular can answer whether I still qualified/qualify for the family contribution limit for 2025 and 2026. If not, I assume I'll need to withdraw money from my HSA for part of 2025 (would have qualified for the family contribution limit until my husband's Medicare became primary) and also lower my contribution for 2026 going forward, correct?

And a follow-up question - if I was still eligible to contribute the full family contribution amount for 2025, but it turns out that my daughter is not a qualifying relative for 2026 (that is, she makes over $5,050 for the year), and I have made the full family contribution amount for 2026 before I know that she is not a qualifying relative, is there a consequence (penalty) other than having to withdraw the overage from my HSA? In other words, should I take the safer approach of lowering my contribution to the self-only limit and possibly forego the tax savings associated with the higher contribution amount?

Thanks for any help!

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