Good morning everyone!  I'm getting a question from someone regarding getting a Plan it's own TIN.

I know for the EIN, generally we use the employers to file the Form 5500 with the IRS.  Is there a need to get each plan it's own individual TIN, however?  And if there are two plans (i.e. a 401(k) and a Cash Balance), would each Plan need it's own individual TIN?

Thanks in advance for your help!  I believe they are looking for a TIN in order to open the pooled account for the Profit Sharing and Cash Balance Plans (not a 401(k)).

We file all our calendar year extension for 2020 in May, equesting extension  to 10/15/21.

More than one client recently faxed an IRS extension approval dated 8/30/21 aporoving the extension to 8/15/21, which assumes a PYE 5/31/20, which obviously is an incorrect extension for our plan.

Since the IRS wait time averages 30-60 minutes, I faxed a letter to Ogden, attaching our extension to 10/15 as well as their incorrect extension to 8/16/21 and a note to please change their records. 

Anyone else run into this??

I don't dabble too often in the education assistance world, but I am not 100% clear on whether a sole proprietor (no other employees) can sponsor his own Section 127 plan to take advantage of the recently modified rules on Section 127 plan and student loan repayments.  Does the nondiscrimination rule effectively make this unavailable? 

Participant P is fired sometime mid year in 2020, does not meet last day requirement for profit sharing contribution. 

In 2021, participant is awarded (by a hearing officer for the company) back pay for lost wages and his/her termination is deemed a wrongful termination. Participant is reinstated as an employee and is a participant in the Plan once again. 

Is participant eligible for the 2020 profit sharing contribution he/she missed due to wrongful termination? 

Does the Plan Sponsor have a correction to make re the 2020 deferrals the participant should have been able to make with respect to the back pay? 

Hi, 

One of the terminating plans has after-tax and funds of all non-responsive participants is to be rolled over to an IRA account.  Since few part's have funds in after-tax, I believe the after-tax money will needs to be put into ROTH IRA and the earnings into Traditional IRA?

Hi

DB/DC combo plans. DC is straight PS only, no other provisions. DB is covered by PBGC.

3 participants, owner/HCE, non-owner HCE and rank&file NHCE.

Both the non-owner HCE and NHCE terminated on 6/30/2021 but worked over 1000 hours. Assume each had final salary of 50k for 2021 i.e. the 2021 w-2's will show 50k for each.

Sponsor wants to terminate the PS plan as of 9/30/2021. His salary as of 9/30/2021 will be 200k and as of 12/31/2021 will be 290k. He has always been at maximum limits for the past 3+ years.

The DB plan will stay active for the time being - no 401a26 issues for 2021.

They are asking me to finalize the PS contributions for 2021 now. I have thoughts on performing all on a very conservative level but want to check on the following.

What salary do I use for the owner for deduction of PS portion and what salary do I use for testing?

If I did not ask the question properly, please feel free to correct.

Thank you

Hi

I think it is ok but want to see what others say.

Calendar plan for 2021. Only PS provisions. It is cross tested with a DB plan. Top heavy provisions only provided by the PS plan

2 rank&file employees terminated with 1000+ hours but plan has EOY requirement for allocation.

Only one rank&file in the DB and already accrued the 2021 benefit.

Sponsor will terminate the PS plan during 2021. However will continue working for the company.

Sponsor wants to provide PS contributions in excess of gateway requirements (combo testing passes easily with minimum gateway). Cannot do that with an 11-g so need to remove last day requirement.

I can do the amendment now retroactive to 1/1/2021, correct?

I also have a deduction and testing related question but will ask separately.

Thank you

I can't think of a better title to this issue, but here's the situation. DB Plan is terminated early in 2020 and the SB is filed along with the F5310 showing a contribution of $170000 made in Jan 2020. Approval letter received in June. The SB shows the $170,000 contribution. This is sole prop employer and the actuarial report is not filed with the F5500. The plan is quite overfunded and it is intended to set up a QRP Plan for the excess assets.

But  the client subsequently elects on his own to remove $170,000 from the Plan and as Employer he amends the business return and pays taxes on it. The question is what would you  do with the 2020 SB, which is the last SB for the Plan?  1. do nothing. 2. amend the SB  and file it with IRS Agent who approved the DT? The MRC is zero in either case and the plan remains overfunded in either case. What would happen if the plan was audited?

Regarding the requirements that elective deferrals and safe harbor contributions cannot be distributed to employed participants until they attain age 59.5 (assuming the doc permits such payouts), I was recently speaking with someone who mentioned that recent legislation (he said either the SECURE or CARES Act) now permits inservice distributions from all sources including deferrals and SH money.  I normally defer to him since he's a TPA, but I haven't been able to locate anything in writing that backs up this change - have the inservice rules changed in this respect?   

I have a plan that did not want to allow CRDs.  A few were paid by the recordkeeper and the Plan Sponsor noticed and shut them off.  I assume that the recordkeeper contacted Plan Sponsors to tell them the "default" was to allow unless they communicated that they did not want to offer.  When they noticed that some were paid, they shut them off.  The recordkeeper tried to recoup the money recently but the employees either didn't respond or had been terminated and had received a full distribution.

How should they correct?  I suggested having the Plan Sponsor adopt the CARES amendment but to only allow until they were shut off.  Any other ideas?  If they don't adopt the CARES Act CRD  - then don't they have a operation error where they did not follow the plan document?

I'm seeing that there is relief for the 5500 filing due date for those impacted by Hurricane Ida but I wanted to verify that this does not currently extend the date required contributions are due past September 15th.

I don't believe it has, but wanted to double check.

We have a plan with an effective date of 1/1/2020 but the plan didn't start contributing until March of 2021 and they are not going to make any Contributions for 2020 so they'll have NO Assets. I believe we still need to file a Form 5500-SF just putting zeros in the financials? Also since nobody has an account balance under 5c on the 5500-SF I assume I put 0 (zero). 

Client does not want to change the effective date to 1/1/21 which was suggested.

If a SH plan terminates with an effective date of 8/31, the termination is due to the company being acquired.  The final paycheck is not due to be paid until 9/9.  Can the plan continue to accept pretax and SH match contributions from the 9/9 paycheck?

This one I'm pretty sure is easy, but I just wanted to make 100% sure since someone asked me.

Can a sole prop, schedule-C have a solo-k AND cash balance plan?

Hi

Owner only plan. The first year of plan is also the first year of the company. Therefore, there is at this point, only one year of salary. If the plan's benefits are based on a salary average of the three highest consecutive years of salary, how is the average determined for this first year? Thank you

Hi, 

Have a terminating plan and I don't believe the plan went through an amendment regarding the UNITED STATES v. WINDSOR Act, now that the plan is terminating will it require an amendment. 

Thanks

If a real estate partnership pays commissions to the two partners which are reported on Form 1099, is the 1099 earnings considered self employed earnings for sponsoring a SEP on behalf of each individual partner? A partner is not considered an employer for SEP purposes but a 1099 individual is considered an employer for SEP.

In 2020, ER deposited $100,000 to a holding account in the plan (I know!).

Maxing out the owner and giving 5% to the EEs results in a $70,000 allocation for 2020 and passing of tests.

Does he have to allocate the remainder to the participants?  Or can he take back the funds as a Mistake of Fact?

I have a participant in a plan that, as a result of her employer moving her from one location to another (and then having to also move her parents, as she is their caretaker), is requesting a hardship withdrawal to "lease" (i.e, rent) a house in her new location. She has no other source of funds and the employer would like to grant this request.

As the lease is for, technically, her principal residence, would you be inclined to grant the withdrawal?

Thanks for any replies.

I'm not perfectly clear on how you would test this design, and would appreciate any insight. 

A 401(k) plan allows immediate eligibility for deferrals on date of hire; the only condition is age 21.

The plan also provides a safe harbor nonelective (also age 21). Eligibility for this portion is the January 1 or July 1 after working 1000 hours (not January 1 or July 1 following a full 12-month period in which the employee completed 1000 hours). So, if a full-time employee was hired on July 1, 2021, they may work 1000 hours before the end of 2021 and enter the safe harbor portion on January 1, 2022. 

This does not seem (to me at least) to impose the maximum permissible minimum age and service conditions in 410(a), so it's not clear that dividing line for ADP/safe harbor would necessarily correspond to the participants actually getting those contributions when using the otherwise excludable employee rule (i.e., some participants who have not satisfied the maximum permissible age and service requirements would be getting safe harbor nonelectives). 

If that's the case, how would you test? Would it be everyone with less than the maximum permissible conditions subject to ADP (even if some are getting safe harbor nonelectives) and everyone with more than the maximum permissible conditions exempt from ADP testing due to the safe harbor? FWIW, this is what ERISApedia and Who's the Employer seem to suggest.