I have a 401(k) safe harbor (3%NE) cross-tested plan with immediate entry dates on DOH for all contribution types. The only service requirement is age 21. There is no EOY requirement or service requirement for the PS contribution and each person is in their own classification group. This plan is Top-Heavy. If you have a new hire (NHCE) during the plan year, can you exclude them based on the otherwise excludable employee rule - meaning the NHCE would not need to receive the minimum gateway contribution with less than a year of service?

Calendar Year plan terminating mid-year in 2018. Plan Sponsor is hoping to have all participants paid out before 12/31/2018, to avoid a 2019 5500 filing. However, the Plan has failed the ADP Test for the 2018 Plan Year (from 01/01/2018 to date of termination - business sold).

Is it possible to calculate corrective distributions mid-year to avoid the 2019 5500 filing? If so, do I just use the gain/loss to a current date?

Even when the ALE offered affordable coverage some full-time employees were able to get PTC/CSR subsidies and it's causing the IRS to propose the 4980H(b) ESRP against the ALE.

So I'm curious if we "prove" to IRS that our employee was not entitled to any subsidy because we offered affordable coverage will the IRS go back against the employee to recoup the subsidies?

If so the employer may decide to not fight the "b" penalty to avoid antagonizing the employee.

Failure began in 2014 and goes all the way through today. Question: Can use the 25% correction option for the most recent years?  Or because the failure goes back so far, do I have to use the 50% to correct for the whole enchilada?

I don't know why COBRA is suddenly popping up all the time....

If an employer (A) has a new employee coming from another employer (B) who offered COBRA, can the new employee us the FSA from (A) to pay for the COBRA payments?

wow, the IRS sure has planned on changing this form!

one basic form, and then you attach a few other schedules if needed.

e.g  Schedule 4 if you have self employment tax

this sample form (and schedule 1-6 can be found here)

https://apps.irs.gov/app/picklist/list/draftTaxForms.html

(I attached the basic form and schedules 1 and 4 below)

schedule 4.pdf

schedule 1.pdf

f1040--dft.pdf

Should late matching contributions be adjusted for earnings?  Are matching contributions "late" if they are deposited within the time period specific in the plan document, but later than the employer's established practice?

An administrative error resulted in a failure to make matching contributions on a bonus payment at the end of February. Error was discovered in May and matching contributions were calculated and deposited in participants' accounts at that time. Plan document states that matching contributions shall be paid to the Trustee no later than the Form 5500 filing due date. The practice has been to make matching contributions each pay period at the same time as employee contributions. The plan provides for a match true-up at the end of the year.

Should the matching contributions deposited in May have been adjusted for earnings from the date they would have been deposited if the error had not occurred?

So company XYZ is slowing going through bankruptcy / asset sales while ramping down their operations. 

The last employee enrolled in the health plan was laid off. There's still about 4 people there, and the doors / wind down might be another 4 to 6 months. 

Is the company required to offer cobra to the last participant? No one else took cobra. 

Since the plan has no participants... Its done, right? There's no health plan for the last employee to enroll into. So why even send out the cobra letter. If he accepts... He has no plan to enroll into. 

Can you check both the 'trust' and 'general assets' boxes on line 9? A Health and Welfare plan with a trust (VEBA) pays for some expenses out of the trust, but pays others out of general company assets. Would you check both?

TIA

What does a small start-up need to disclose to participants about employer securities held by the Plan, in particular for those who do not have any money in the Plan. 

All participants have signed forms confirming they have been offered the opportunity to invest in the stock, but none have taken up on the offer.

Should participants be receiving income statements?  Do  we just share the valuation of a share of stock? 

What legal issues would be associated with a self-insured health plan requiring use of a 340B provider as a condition to covering certain, high-cost prescription drugs? HIPAA non-discrimination? ADA? Are there "network adequacy" issues? Other legal issues?

5 participants exceeded 402(g) limit for 2017 plan year ending 12/31.  All 5 receive k-1's.  Since the distributions occur after 4/15 I believe the excess along with earnings will be taxable in the current plan year AND the prior year.  Does this mean 2017 K-1's will have to be amended and if so, how will the additional earnings affect the calculation of the safe harbor match?  Not all members earnings exceeded the 401(a)(17) limit.  

Finally I assume a Form 5330 will have to be completed for the excess deferrals and an excise tax will be owed by the plan sponsor.

Anything else I might be missing?

A 401k plan has 15 active partcipants (8 have a balance) and 10 terminated with a balance. Of those 10 term, four are 0% vested. So for lines 5b and 5c, do I count the terms who have a balance but are 0% vested?

Would line 5b be 25 (15 + 10)  or 21 (15 + 6)? Would line 5c be  18 (8 + 10) or 14 (8 + 6)?

Any official link, code, or publication I can reference?

I have a client whose plan is top heavy.  They have a 15% owner who does not participate in the plan but has a large balance due to past participation.  They are trying to avoid top heavy status.  Is it permissible to exclude this key employee from the plan and disregard his account balance  (as a former key) from the top heavy calculation?  Thanks

Is there a general consensus on who is responsible for signing the Form 5500 when the trustees change after the end of the year? Would the new trustee sign the prior year's 5500, or does the previous trustee retain that responsibility? 

I am looking at information for "completing Form 5500 Schedule C     - I am trying to decide if I need to complete it.

There is Direct compensation paid of $110 to one service provider and $1333 paid to another.  That is all.

Since neither is over $5000 - does Schedule C need to be prepared?    Thanks.

When we took over this 401(k) plan, union employees were not excluded, but the plan sponsor wanted us to exclude them when we restated the plan document, so we did on a prospective basis.

What happens when a union employee goes non-union, and then switches back to union status?  Can he defer from that new union pay because he was grandfathered?  Or because he switched to an ineligible class after the amendment date, can he not defer any longer?  Thanks.

Hello,

Am filing 5500 and trying to see how to account for a profit share for 2017 that was made in Jan-2018. Since it was made in Jan-18, the Dec 31, 2017 balance does not account for this. My business tax did account for this in 2017 taxes.

So, question is - Should I add this amount to 2017 ending balance or should I account for in 2018? 

Thanks,

For employees returning from military leave, it's my understanding they have the option to make their employee contributions for time out under USERRA, but are not required to do so.  What about the employer's contribution?  Does it have to be made if the employee elects not to make his/her contribution? 

Hello,

While the issue does not come up exactly in the context of an ESOP, the administration of the Plan/Fund is similar enough to ask the question here.

Can a Plan Administrator reallocate the unvested shares of an employee who has currently left the employ of the company to other participants before a "forfeiture" event (i.e. 5-year break in service or distribution)? The idea is to keep the account "open" and accounted for, but have the shares reallocated. In the event the employee comes back before a forfeiture event, the shares would be reissued/contributed/reallocated to the returning employee.

The Volume Submitter Plan this fund is based off of states that the Plan Administrator will continue to hold the undistributed, non-vested portion of the account of a participant until a forfeiture event, so I believe that as the plan is written, the stock would need to remain in the account and not be reallocated. However, can the plan be amended to state that only the account will remain "on file" but allow for the stock to be redistributed?

On a similar note, can a plan be amended to shorten or do away with the 5-year break in service requirement (other than by allowing a distribution)?

I am pretty certain that one cannot because the ERISA Outline Book (2016) makes no mention of it;  because seems IRC Sec. 411 requires a 5 year period; and because of the issues of cost basis and the deduction of additional contributions (to make up for growth-or is growth even accounted for during the break in service period?), but my assigning attorney is pretty certain that the Plan can be amended to shorten the time before forfeiture.

Full Disclosure: I am a summer associate, but I intend to work in the Benefits practice and have found this forum helpful.

I would appreciate some guidance as to additional resources I can look at.

Thanks!