A Client's wife inherited an IRA from her mother in 2017. The wife passed in 2020, so now the husband is the beneficiary of the Inherited IRA. Ignoring the waiving of RMDs for 2020 due to the virus, does the SECURE act now apply and does the husband have to take the full balance out within 10 years?

I know there was an extension in funding an IRA with the due date of tax returns being pushed back until July 15.  I haven't seen anything that states the same is true for Employer Contributions for the 2019 Plan Year.  Has there been any clarification on that?

Thanks as always!

Hi

Looking at a 2018 k-1 for a takeover plan (partnership and each partner is making the same amount). I am not sure if I am providing enough information but something does not seem right, at least to me.

K-1 line 14 is 125,000 (same as line 1 - ordinary business income)

Partner pension deduction is 25,000

Partner employee portion deduction is 1,000

Partner health insurance deduction 15,000

The amount subject to self employment tax was calculated based on 85,000 (125k less 25k less 15k)

My approach to calculate the amount subject to self employment tax would be 124,000 (125k less1k - employee portion)

What am I missing here? Your comments are appreciated.

Thank you

Since Many/all are working remotely will the fye 6/19 5500s that were on extension until 4/15 be included in the new extension?  It's hard to understand if it is not further extended. Thank you.

Participant elects flat dollar amount to be withheld from paycheck.  Pay amount for this pay period is less than the election amount.  Should the election be ignored or 100% less tax withholding be withheld?  The document, deferral procedure and enrollment form are all silent on the issue.

Thanks for any guidance.

Do you think it was intentional or an oversight that the criteria for a qualified individual includes reduced work hours, but not reduced compensation?

If a salaried employee is required to work the same number of hours at a reduced salary are they out of luck to be considered a qualified individual?

Thanks.

The CARES Act says that minimum required contributions due in 2020 can be delayed until 1/1/21.  If a calendar year DB plan has a 2019 MRC of $40k due and a maximum allowable contribution of $200k and the employer wants to contribute $100k, a literal interpretation of the Act could imply that $60k would still be due by 9/15/20 while only the $40k MRC can be delayed until 1/1/21.  In other words, the seemingly unintended effect would be that an amount greater than the MRC would be due by 9/15.  Should the new rules be taken to mean that the whole contribution can be deposited by 1/1/21 even if it exceeds the minimum required amount?

Can someone confirm that a FICA Alternative Plan functioning under a 457 or 403(b) plan is covered under the CARES Act. 

Hi there, we are having a debate about the repayments of COVID distributions back into the plan, and if they should be coded as normal (pre-tax) or as after-tax.  I understand that ROTH has to be accounted for separately.  I believe that since the repayments offset the tax burden, the monies become pre-tax once again.  I can't find anything specific on this, so I thought I'd come to this forum for guidance.  Thanks in advance!

I was drafting a Coronavirus-related distribution application form, which included the certification that the applicant is an eligible individual. The question I have is since the employee has to represent that s/he has been diagnosed with Coronavirus, that a spouse or dependent child has or that s/he has experienced adverse financial consequences, the first two trad awfully close to HIPAA protected health information. Fortunately, this client has a TPA that will be administering this provision (as well as other facets of the plan). The question that I have is does the possible application of the first two grounds of qualifying for a coronavirus-related distribution subject the plan to all the HIPAA privacy requirements? I would like to hear your thoughts on this.

I am confused two sites I use have different answers to the same question.  It is in regard to if I can extend a participants loan past 5 years because of the CARES Act.   Here are the excerpts from their websites:

Website 1)  However, a participant with an outstanding plan loan who is placed on an unpaid leave of absence may forego making loan payments during the leave of absence without triggering taxation of the loan, provided the following requirements are met:

1. The unpaid leave of absence does not exceed one year.
2. The loan must still be repaid by the end of the original term of the loan. Thus, the participant may make up the missed loan repayments upon returning to work, resume the original repayments with a lump sum payment of the missed repayments at the end of the term, or increase the amount of each repayment for the remainder of the repayment period upon returning to work.

Website 2)  Any participant loan payments due from Qualifying Individuals between March 27, 2020 and December 31, 2020 can be delayed for up to one year. If this one-year delay applies, the normal five-year maximum repayment term is extended to six years

See my confusion, one says must be repaid by the original term of the loan and the other says I can change a 5 year loan into a 6 year loan.

Can anyone clarify for me?

Thanks.

Has anyone received formal guidance on calculating  Self funded health plan cost for the PPP application? I know you have to back out employee contributions.

The banker indicates it has to be on a cash basis; so if true, that would rule out a few methods. Haven’t seen any guidance yet. Carrier has not advised yet either.

so it is clear that the 402f notice is not required. What about something stating 10% is default withholding (unless chosen otherwise) and the repayment period and the stretch taxes and all that jazz? seems like it should be required, but is it in notice form?

I have a client who took his RMD in January 2020 for 2020 from his IRA.

Due to CARES can he put it back in the IRA now?  It has been more than 60 days since he took the RMD.

Advice please.

So client amends the plan to add all of these wonderful new options.  What are the obligations to tell the participants about the options?  I happen to think we should be telling them about the options proactively.  Perhaps that is based on more on ethics than law though.  What is the law?  

If a plan sponsor maintains both a cash balance plan and a defined contribution plan and the plans are top heavy, it is my understanding that the top heavy minimum must still be funded, regardless of the DB plan’s frozen status. But my question is, would that contribution amount be 3% or 5% and would the amount depend on the contributions funded by the Key employees?
 

Available for DB plans?

I assume plans would need be amended to include a withdrawal provision and then add the $100K COVID-19 language?

I believe I have the answer, but can't seem to find the actual language so I apologize.  In the 401(k) + Cash Balance Situation, when calculating the EBAR to test both plans combined would you include the 3% Safe Harbor in the equation?

Again, I apologize if it is a simple question just can't seem to put my fingers on it.  Thanks again everyone!

I apologize if this has been asked before, but has it been established that if a spouse gets furloughed/loses hours a participant falls under the "adverse financial consequences" to determine eligibility for the in-service distribution/loan under the CARES Act?

Thanks everyone!

Just curious on how others will treat the new distributions for top heavy testing purposes.  The main concern is the ability for participants to contribute the funds back into a plan.  If the money isn't paid back, I assume it'd just be treated like other in-service distributions. 

If the money is recontributed though, would these funds be ignored?  Or would the balance associated with it be included in the top heavy balance (and then you'd probably have to back out the in-service so it's not double counted)?

Thanks for your thoughts!