Hi

Sponsor is an S-corp.

2019 MRC is 150k and they deducted 200k, all fine, however (

As far I know, S-corp extended filing deadline is 9/15/2020 (not extended by any Acts/laws) but they made the deposit today. They lose the deduction for 2019, correct? Deposit was done by wire transfer so 9/18 date is firm.

As for the extended deadline to meet the MRC.

For 2019 plan year, assuming that they missed the deduction deadline, what should I use for 2019 sch SB+5000? All 200k or 150k plus a few days of interest adjustment, say 1k for total of 151k?

I must be missing something here.

Thank your thoughts/comments

A plan terminated in 2019 with last distribution say 10/31/19. One year wait is 10/31/20.  I know a new plan could start 1/1/21 for sure. What about anything in 2020? Could they do a short plan year say 11/1/20-12/31/20 and have everything prorated? Safe harbor would be a no go.

I found out two years ago that the pension administration of ex spouse did not approve the QDRO submitted by court. It was unacceptable, my attorney withdrew at the end of settlement and appointed another attorney to have me sign the papers! My ex has been receiving the full pension.

I have a stipulated Resolution in which I'm entitled to half; his lawyer has since pass away! I'm on a limited income and the state is Delaware which I no longer live in so legal aid can't help me! My ex is aware of this; he called the administration and they sent him forms to resolve this but its been two years and he has not! The administration actually told him he would be better to just remarry me; we were married 25 yrs and he worked for General Motors!

Please advise if this is a control group.  Your assistance would be greatly appreciated. 

Company A- has 1 owner                    (has employees other than owners)

John Doe   owes 100%       

Company B -has 2 owners                              (has employee)s other than owners)

Owner 1  John Doe owes 50%

Owner 2    Bob Jones owes 50% (friends only)

Two beneficiaries are 50/50.  Participant dies recently (i.e., within a month or so).  Beneficiary A is well off and does not want the money, they want it all to go to Beneficiary B who is not as well off.  Can Beneficiary A disclaim the benefit?

I have the IRS said yes, but one federal court said no, and another one said yes, etc.  And I have heard state law is an issue.  Our volume submitter document (Corbel/Relius) appears to be silent on the issue...

Anybody have a good - or lousy, as long as they have an address ? - participant search service for one-offs?  I had saved a post from long ago that recommended PBI but they are expecting $1000 in fees. 

Good afternoon to all,

The Form 5500 filing for a client has been made under an erroneous EIN for years and was discovered in 2018.  The administrator in our office after trying for days to get through to someone at the IRS finally got an employee on the phone.  He was told to amend the 2018 return showing zero participants, zero assets and mark it final.  Then file an amended 2018 return showing the correct EIN and all the original data that was filed on the first return.

Has anyone else ever done this?  It seems very convoluted and we don't want to create even more problems with the "fix" than we already have with the original problem.  Do you agree with the agent?

Thank you.

With regard to the whole issue due to PLR 201833012, and a 401(k) plan with a new comparability formula with everyone in their own group:

During discussion, an idea was floated about not formally amending a plan, but (if limited to ONLY NHCE's) if an employer could simply make a contribution to the accounts of anyone who made student loan repayments.

This is an interesting question. It doesn't pass the "smell" test, but based upon the PLR's analysis of the contingent benefit rule, what rule(s) might this violate? Certainly won't hurt coverage/nondiscrimination testing, if limited to NHCE's. No requirement for a participant to defer to receive this benefit.

It's hard to imagine that the IRS would allow this willy-nilly for all situations. Car loans. Mortgages. Whatever. Since it is a PLR, they could simply say "no dice." I'm just curious about general thoughts. (I wouldn't even have raised this question in the old days of definitely determinable benefits, but with documents that allow for employer discretion to each participant, subject to coverage/nondiscrimination testing, it raises some interesting discussion.) 

Thanks.

Company sponsors a safe harbor 401(k) plan.  Plan uses the basic safe harbor formula.  Plan also allows for profit sharing, each participant being there their own allocation class (with last day requirement).

The Plan Sponsor would like to encourage more participation from lower paid participants.  They are thinking of making an additional profit sharing contribution to non-HCEs only that hit certain deferral limits during the year.  For example, if they defer half of the 402g limit they would receive $500.  If they defer the full 402g limit they would receive $1000.  

Has anyone had a plan that had such a program?  If yes, how did you communicate the program to the participants?  I'm thinking at the very least you would have to be crystal clear about who is eligible each plan year and exactly how much they would have to defer to reach a profit sharing contribution level?  

Any thoughts would be appreciated.  Thanks!  

Ees with under 20 hours per week were excluded from participation, butt he document did not indicate that they were excluded.  Have people tried to do VCPs for this to amend retroactively to exclude?  

This relates to health FSAs.  Notice 2020-29 allows employers to treat the dollar amount of year-to-date reimbursed claims as a floor, below which participants may not reduce deferrals.  However does the uniform coverage rule still apply to claims incurred before the change in coverage?  This would seem to result in rewarding participants who delay submitting requests for reimbursements?

Example 1 - Late Reimbursement Request

• For the 2020 plan year, Lucy elected to contribute $1,200 to a health FSA, or $100 per month. She has

contributed $600 for Jan-June 2020.

• On May 1, Lucy incurs a claim for $1,200.

• On July 1st, Lucy reduces her 2020 election to $10 per month for the remainder of the plan year. She expects

to contribute $60 for July-Dec 2020 ($660 in total).

• The employer can limit Lucy’s ability to reduce her annual election if she had received more than $660 in

total reimbursements before July 1, under Notice 2020-29.

• But the uniform coverage rule in the section 125 regulations arguably still allows Lucy to submit her May-incurred claim for

$1,200 for reimbursement.

Example 2 - Prompt Reimbursement Request.

Same facts as above, but Lucy submits her claim for reimbursement in June 2020.  On July 1, Notice 2020-29 allows the employer to prevent Lucy from reducing her deferrals because her May claim was $1,200, her full deferral budget.

This discussion suggests scenario 1 can be avoided "by carefully defining the period of coverage for 2020."  I am not sure how that would work but would welcome comments.

We're seeing more stale dated checks being re-deposited by recordkeepers into plans--typically to an unallocated cash account or the forfeiture account. How are others reporting these on the 5500 filings? Obviously the checks have been shown as distributions in prior years.

Participant in April, 2020 takes a $50,000 loan

Participant, because of COVID, wants to pay off the first loan to take the $100,000 COVID loan. Participant pays off the loan, requests $100,000. Asset Custodian rejects the loan, saying the maximum loan amount is $50,000; $100,000 reduced by highest outstanding loan balance in the last 12 months ($50,000). I agree with this calculation.

Question is: Is the loan limit calculation a safe-harbor calculation? Could the plan sponsor decide to ignore the limitations and give the person the whole $100,000 loan? I think not, but wouldn't mind seeing if anybody has run into this before.

Thanks for any replies!

Would everyone agree that, in the case of a VEBA maintained by a tax-exempt entity, 419A(d) does not require the entity to establish separate accounts for key employees?  Since 419A(d)(1) states that it applies to the first taxable year for which a reserve is taken into account under 419A(c)(2), I assume that no separate accounts would be required.  Obviously, these employers aren't concerned with the general deduction limitations of 419 and 419A.  However, I want to make sure these amounts don't need to be taken into account for 415(c) purposes under 419A(d)(2) and that no excise tax is triggered under 4976(b)(1)(A).

Thanks in advance!

I have a client that has historically been a 5500 SF filer, consisting of a husband and wife, and one employee.  The employee left the firm in 2017 (was not replaced) and moved their money of the plan in early 2018.  In 2018, they filed a 5500 SF as a Single Employer plan because the terminated employee still had money in the plan for a portion of the year, and the plan was still covered by a fidelity bond.  For 2019, should I have them file the 5500 SF as a One Participant plan (dropping the bond requirement) or should I continue to file them as a Single Employer plan?  I still think it's easiest to have them continue to file an SF as opposed to switching to an EZ.  It's a fairly simple situation. anyone see any issues either way?

Hi all, I'm new to this world, so please bear with me.  I'm hoping I can get insight from this Board regarding the following scenario:

Large government employer (~550 employees) currently offers a cafeteria plan which employees can use to pay premiums for medical, dental, life, and to make contributions to FSA and HSA.  Employees must elect one of the medical policies offered, but otherwise they can take the rest as cash if they make no other elections/contributions.

Employer is considering allowing employees to opt out of medical coverage if they can show that they are covered under their spouse's medical.  This would mean that employees may get all the cash from the cafeteria plan if they make no elections/contributions.

Depending on which union the employee belongs to, the employee will have a different total cap on his/her cafeteria plan.

What issues do you see?  

Good morning all

Looking into designing pension plan for a financial planner. Owns 100% of X, Inc. and has employees.

Checked the website and see that other names were listed other than the employees.

After questioning the additional names, the following response was provided:

I own 100% of X, Inc. but affiliated with Y, Inc. (also a financial form) and have access to Y, Inc.'s people. No common ownership or shared employees.

What am not asking here to determine any issues?

Thank you

PS PBGC coverage is another issue - any thoughts?

Plan had a hard cap on a discretionary match.  It is $250 in the document, but for the past couple years, they have been contributing up to $350 to those who qualify.

Can we do a retroactive amendment to change it starting in 2018 when they made the change?  ACP test passes no problemo.

Mostly union people.  I guess I should ask if the union docs got updated....

John Hancock Sch C Report showing RIA information.  Compensation paid to the RIA has been reported on Sch H as a plan expense.  Do you list the RIA on the Sch C?  Do you contact the advisor to be sure you are correctly referencing this is Direct, Indirect, EID etc?  I doubt the advisor will have any ideas but I want to be sure I am properly including this and feel like I'm not 100% positive I'm doing this part correctly.

Thanks for any input.

What are your thoughts on this; a firm has audited a 401(k) plan for many years. A new auditor was recently assigned this year and has brought up a potential issue that has existed since the plan was established. Is it fair to ask why they never caught the issue earlier? Does the firm have any culpability in this case?