The Maryland State mandatory tax withholding has been 7.75% as long as I can remember. However, we recently were notified that the mandatory percentage is now higher for 401k withdrawals. Does anyone know what the new state withholding for Maryland is?

Thank you.

Do any TPAs list themselves as Trustee in their client's plan document if they provide Administrative "trustee" services, such as benchmarking fees, confirming deposit of contributions in the plan, signing off on distributions, etc.? This is not 3(16) services. If there is a service agreement in place with such services indicated, what is the benefit of putting the information in the plan document? 

Hi all

PS plan is utilized as a QRP and has both the QRP assets as well as PS assets. Let's say balance are 50/50. All assets are comingled and pooled so no individual accounts.

Clients pays x amount annual fees from the plan assets.

Can the fee be split 50/50 i.e. 50% deducted from the QRP balances and 50% deducted from the PS balances?

Thank you

Could an Qualified Individual take a CARES Act distribution from a governmental 457 plan and repay that distribution over the next 3 years to the same governmental entity's defined benefit plan rather than the 457 plan? I believe so based on the language below, but want to see if anyone has any different thoughts.

(A) IN GENERAL.—Any individual who receives a coronavirus-related distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make 1 or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), of the Internal Revenue Code of 1986, as the case may be.

We have a former participant who left our client for non-COVID-19 related reasons and started working for another employer.  That employer just laid her off.  Can she now seek a distribution from her former employer's plan because she's been laid off from her current employer?

Plan makes a 3% SHNEC contribution-all ees receive contribution

Plan makes a 4% ER PS contribution-this contribution has a last day/hours requirement.  Not all EEs receive.

For 410(b), it is my understanding that all ER contributions must be tested together.  Since all ees are not receiving the same allocation rate (due to last day/hours), this triggers the need for a 401(a)(4) rate group test.  In reading through the EOB, it seems that if you can pass 410(b) on each source separately, then you are ok.    What is the best approach to solving this?  You need to run the 410b on an aggregated basis, but then run separately to satisfy the rate group?  Or do you aggregate and go to rate group testing?

How do these rules come into plan when you have a ER PS allocation and a Top Heavy minimum? 

Example:  ER has 1000 hours/ last day.  Employee is employed on last day, but does not met hours.  This EE receives a Top Heavy min contribution of 3%, but not the ER allocation is 4%.  Does the same logic apply to this situation as it does to the SHNEC/ER allocation?

I'm embarrassed to even be asking this question, but I've managed to twist myself around on a very simple question. Profit sharing plan, forfeitures can pay expenses or be used to reduce employer's contribution. Forfeitures are NOT reallocated.

Participant terminates in 2020, receives full distribution, so forfeiture occurs during 2020, for the 2020 plan year. Can this forfeiture be used to reduce the 2019 plan year profit sharing contribution deposit that is made in 2020?

Looking out at the snow blowing by the window is freezing my brain.

Here's a text of the Senate-passed bill.

Paycheck Protection Program and Health Care Enhancement Act bill.pdf

Has anyone heard that 5498-SA filing deadline has been pushed to August 31?  The only thing I know if that Notice 2020-23 extending the filing and contribution date to 7.15.  We have an HSA sponsoring saying their filing deadline was extended to August 31.

Due to current economic hardships, plan sponsor would like to not make safe harbor contributions for the HCE's (all family member owners) for the prior plan year. Is this actually possible? They'd also like to stop current year to date safe harbor contributions to themselves.

Forgive me if this has been covered.

The SECURE Act allows employees with 401(k) annuities the opportunity to preserve the annuity if the plan sponsor changes providers or eliminates the option altogether.

Employees can do a direct transfer to an IRA or another plan that accepts the annuity.  Or, it can do an in-kind distribution.

The first option would be tax-free, but what about the second?

Appreciate any insight.

The FAQs issued on April 11th by the DOL state that health plans will be required to cover COVID-19 testing with no cost-sharing, etc. during the current declared public health emergency relating to COVID-19.  A footnote states that this declared public health emergency is scheduled to end on April 25, 2020 unless extended.  I have been unable to locate any information about an extension.  Am I correct that, absent an extension, health plans may stop covering COVID-19 testing with no cost-sharing on April 26th?

Hello, I have a client who owns a Foreign Entity in Australia.     The Employer is Australian, but owns a residence and lives in Manhattan.   The employer does Not have a US Resident Alien SSN.   How can they not have one of these, but have a US Payroll bank account?  

The Employer has 2 US Citizens and would like to establish a 401k plan for their US Citizens to participate in.  Over then next 12 months, they will be hiring 30-40 more US Employees.     So we are having a difficult time finding a platform for this type of client from a Trustee perspective.   Does anyone know what investment platform would allow for a Foreign Entity, with a US Residence obtain approval as Plan Trustee?

Charged tips will be paid via W-2 wages. Participants are able to defer on these tips.

The employer makes a Safe Harbor Match Contribution- They want to exclude tips from the definition of compensation for the safe harbor match.

1. Can tips be excluded from compensation for the Safe Harbor Match?

2. If yes, since the plan is safe harbor, this mid year amendment to change formula and definition of compensation is not allowed for 2020?

3. Since this would not meet the safe harbor definition of compensation, the plan would need to pass compensation test at year end ? 

4. Not a Top Heavy Plan.

Thanks

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I'm reviewing a GAAP valuation report whose signature block for years states that the actuary is an EA. There's nothing wrong with that- after all, some of my best friends are an EA.  On checking the credentials I found that the person is also an ASA (with other related and very impressive credentials) .What I am struggling  with is why the signor doesn't include the ASA designation in the signature block.  (The person is still active and in good standing).

Any ideas or suggestions as to be on the lookout for hidden landmines? 

Has anyone seen anything about plan audit relief?  I have a client that cannot afford their plan audit right now.  Restaurant group.  I haven't seen anything yet. May tell them to work with their auditors for some relief.

Thanks!

I have a client with a safe harbor nonelective contribution plan that wants to exclude Christmas bonuses from contributions for 2020.  My first thought is that this is a "reduction" in the contribution and, as provided in Notice 2016-16, can be done as long as a notice is given. However, the SECURE Act made it so there is no notice required for the SHNE safe harbor plan.  The more I read my research materials the more confused I become - is this mid-year change allowed?  If so, does ADP apply? Is there a notice required? 

Hello - thank you in advance for trying to answer this question:

I was co-employed by a PEO and know the combined employer/employee rates for Medical coverage because I have the contract between my former employer and the PEO.  Therefore, when I received the Cobra notice, I was surprised that the Medical rate wasn't just 102% of the total cost of the medical plan (employer + employee).  

Is there something that I am missing that would allow the PEO to charge more than 102%?  

Thanks again.

I know this seems like an elementary question, but where in the regulations does it state that an individual's coverage must end in a Health FSA upon termination and therefore no expenses incurred after termination may be reimbursed (unless COBRA)?  I may be making this more difficult than it is, but the definition of Period of Coverage does not provide that the Period of Coverage ends upon termination.  And under the Uniform Coverage rule, amounts must be available during the entire Period of Coverage, but 1) if one is on a LOA and doesn't make the required contributions or 2) terminates employment, I realize expenses incurred when not a participant aren't eligible expenses, but my brain is a not helping me find the specific regulation language/section and I'm drawing a blank.