We need guidance to determine if we need to provide more information than we have in the past and determine how to identify experience rated groups per the definition by the DOL.   

Five companies have adopted a plan.  There are three owners.  Company A & B are owned 100% by owner 1.  He also owns 33% of company C.  Company A and C have negative self-employment earnings on the K-1.  Company B is positive income.  When combined, the net income is negative.  Can he defer from the positive compensation earned through Company B?

I think the other way to ask is - do I consider the compensation from Companies A & C to be ZERO or do I actually use the negative number when determining 415 compensation? 

Thanks,

Kathryn 

We are taking on a new client that adopted an individually designed plan in 2009.  It was never updated beyond that date.  Furthermore, the existing document is questionable, and there is no determination letter.

The client is not interested in going through VCP because the new fee structure along with the fees we would be charging to correct are too costly.

I am not comfortable taking on a client whose document is out of compliance.  At the very least, I feel we should go through all of the steps you would go through if you were going to submit the document through VCP.  Then leave it up to them to file the submission.  

What is our culpability if they fail to submit?  What have others done in this situation?

Thanks!

A plan terminates in 2016 and funds were distributed.

Company opens new plan for 2018.

Are those plan distributions added back in as in-service withdrawals for 5 years?

If a group offers a DCFSA plan on an off calendar year (02/01-01/30), can an employee change payroll contributions so that his entire election amount ($5000) worth of contributions to be reported on his W-2 for the calendar year and stop contributions for the last month of the plan year (Jan)?  If allowed, will this impact the new plan year election amount? 

3 Plans that must be aggregated for testing.  

all 3 plan are safe harbor match.  1 plan with most of the HCE is immediate entry for SHMC.  the other 2 plans are 21, 1year and dual entry for SHMC

the regs say for SHMC to satisfy the adp/acp testing, the "rate" cannot be greater for the HCE than non-highly.  If my highly are getting it immediately and non-highly have to wait a year and dual entry in the other plans, am I required to run adp? acp? both

For the schedule of reportable transactions (schedule 4i), should the activity be listed at a fund level (if many investments within the fund) or at an investment level?

CPA is telling me that a maximum deduction is:

Schedule C - 1/2 SE - Medical Ins. = Max Deduction

51,320 - 3,626 - 14,400 = 33,294 and I get $33,539

I have never heard of a Medical Ins offset limiting the contribution.

Have I learned something today (and so its time to go home?)

Thank you

Can anyone tell me a reason for choosing ADP Safe Harbor only in the Adoption Agreement?  Why wouldn't you always choose ADP and ACP Safe Harbor?

Participant takes loan on his vested account balance, terminates several months later, having only repaid 2 quarterly installments.

Pardon a senior moment, but I believe the total account balance is the investment fund balance plus the outstanding loan balance.

Participant wants to take his money, default on the loan.  Loan default would be outstanding balance as of the date of last payment plus interest through the term of the loan.

He is eligible to rollover the investment portion of his account and the loan balance plus accrued interest is taxable.

Two 1099Rs, one for the rollover, one for the loan default.

Participant over 59 ½.

Is the loan default subject to 20% withholding?

New plan to be effective 1/1/2018. Participant count will apparently be 101, so audit would be required.

What if the 2 owners are excluded? Are excluded employees who have otherwise satisfied eligibility considered "participants" for BOY count purposes? The 5500 instructions don't seem crystal clear on this.

If they don't have to be included, we could exclude the owners, then amend the plan, say, February 1 to bring them in.

Seems a little too cute, and the consequences of not filing with audit if required are, of course, draconian. The phrase "earning or retaining credited service" in the 5500 instructions makes me nervous...

P.S. - FWIW, it seems to me that under 2510.3-3(d)(1)(ii)(A)(2) you are still a participant, even if in an excluded class.

OK, I know I know this, but just not today.  Like it says on the tin: if a rollover comes from a SIMPLE IRA to a 401(k) of the same employer, does that count as a related rollover?  Thanks.

I know a sole proprietor and/or partner has until the due date of their tax return to make the contribution, including deferrals.

I do not believe this applies to a shareholder of an S Corp, maintaining a SHNE 401K with common law employees.

I believe the employee contribution would have had to have been made by 12/31 and the employer contribution would have to be made 9/15 on extension.

Company matches 6% of contributions. There is Pre-tax  and after tax Basic, Supplement, Roth. I don't know whats the best choice. Do you split, confused?

I have a takeover plan (from a payroll company!) that never corrected the 2016 failed ADP Test and the Plan Sponsor was never told the Plan was top heavy. If correcting the 2016 Plan Year, under SCP, can the QNEC also be used to correct the top heavy minimum allocations (same as the current year use of QNEC to satisfy TH minimums)?

Good afternoon to all,

A plan of ours has a 3 doctors plus staff.  While all docs are HCEs, only one is also Key - the 100% owner.  The other 2 doctors have signed irrevocable waivers of participation and are not part of the plan.

They are in the census in our software program, classified as being in an ineligible class of employees.  When we run the Top Heavy calculation, we get error messages saying that we have failed to meet the TH requirements because these two doctors are not getting a TH minimum contribution.

If they have signed the irrevocable waiver, it is our understanding that they are not eligible for any portion of the plan at any time, including the TH minimum.  Are we correct on this?

Yes we have read the plan document and yes we have a call in to the software provider to see if we are coding things incorrectly.  But in the meantime we wanted to ask the experts if these two doctors are supposed to be counted for any purposes in anything in the plan, Top Heavy or anything else?

Thanks for any advice and don't shoot the messenger.  Per usual I am being asked to resolve something on a plan that is not mine.

I don't work with these plans. Say a business has 500 employees, of which (pick a number - let's say 90) are highly compensated - say a giant medical practice, or a corrupt political campaign organization... Are these plans limited to a "select group of management or highly compensated employees" similar to a 457 plan, or are there no limits on who/how many can be covered?

Please don't waste any time on this, as it is a quick general question. If it requires any research, PLEASE don't bother!! Thanks.

Hi All.

I have a client who performed an In-Plan Roth Conversion (IPRC) a few years ago.  He was in a segregated account and even "carved out" that portion and opened a separate segregregated acct just for that newly-roth money (which is still inside the plan, keep in mind).

Fast forward to now, and client is changing investment custodians.  The new custodian is saying they won't accept this Roth segregated plan account because it's Roth conversion money.  

Is this something you've heard of?  What can we do, besides finding a new custodian?  My client has always been a little nervous about the IPRC, and now his fear is being proven.  He is worried that when he finally rolls all his money out of the plan, he will be taxed again on that part which has already been taxed!

Thanks all!

Is a top-heavy contribution required to the non-owner HCE based on the following?

• 401(k) plan.
• 3% non-elective safe harbor contribution with excludes key employees and HCEs.
• Non-owner HCEs are making deferrals but excluded from all employer contributions in plan document..
• Plan is top-heavy.

Company A is selling Sub X.  

Executive works for Sub X.  As part of the deal, Company A is going to provide nonqualified deferred compensation to Executive.  However, after the transaction, Executive will not be an employee or independent contractor to Company A.  

First question:  Are there any problems with Company A providing a nonqualified deferred compensation arrangement to Executive, considering Executive is not a service provider to Company A?

Second question:  What is the governing law here?  Code Section 409A is all about service recipients providing nonqualified deferred compensation to service providers.  We don't have that relationship here.  Or, do we, since Executive was a service provider to Company A's Sub X, and it is that relationship that lead to this situation?

Any advice would be helpful!