I’m single and have zero income so I haven’t had to file a tax return for the last couple of years.  If I take a small early w/d, say $5000, from my 401k would I need to file a tax return for an annual income of only $5000.  My rough calculations seem to show that between my exemption and standard deduction it would be a wash.  But I thinking that because of the source of the income I would have to?

So, if a company is owned 100% by an ESOP, is there any exception to the excluded stock rule in 1563(c)(2)(A) that would allow (or require) this company to be considered part of a controlled group? It seems like the stock is initially attributed under 414(b), but then disregarded under 1563.

If a 403b loan policy is amended to permit loans to terminated participants - in distinction from allowing an active participant to take the loan and then continue loan payments after he terminates.  Is there any down side to this? The loan policy provides for repayments via ACH so provided the terminated participant is able to set up the ACH deductions correctly and timely, I guess this is ok but have not really encountered it before and wanted to know if anyone has any experiences with this situation?

Thanks!

Does Medicaid follow the same rules as Medicare in terms of "Secondary payer" rules? For example, if someone is under a group health plan, (more than 20 employees) also has an HRA, and is ELIGIBLE for Medicaid, and Medicaid pays a provider for something,  the group health plan should pay first, then Medicaid?

What happens if there is a deductible on the group health plan - let's say $1,000, and the provider charge for services is $800. The employee writes a check for $800, then is reimbursed from the HRA. Now Medicaid or Medicare pays the provider as well. Is the provider obligated to send $800 to Medicare/Medicaid, or does the provider send $800 back to the employer HRA?

I really have no idea how these rules work. I believe the provider is required to bill the primary payer before billing Medicare. Then if the primary payer denies all or part of the claim, the provider bills Medicare.

Can an HRA even pay you if you are covered by Medicare or Medicaid?

I hate the control group issue.   I don't agree that a guy, who has 2 totally separate businesses in every way, must include both companies in coverage and testing.  That said I just need confirmation that there is nothing I am missing.

Guy is a financial advisor... independent RIA

He also has a real estate business

100% owner of both

Control group... yes?

Thanks

I know a participant can continue to make repayments on a defaulted loan (if an after-tax account is set up), but are they required to?  I've seen/read different things, so I want to be clear.

Thanks!

Hello, so quick question regarding a late 5500-SF:

Recently when going through finances I noticed that I forgot to file my 5500-SF on the efast.dol.gov website in 2015 and 2016. (Well, I didn't "forget" but rather I missed a special link in my payroll, which passes the final electronically-filled form to efast...). I have filed 5500-SFs in years prior, and had planned to continue do so. However I am a one participant plan with assets < $250K, so it is my understanding that it is was technically not necessary to file.

The other day out of panic, when I noticed those 2 years weren't filed in efast I submitted them anyway. However I realized afterward there is a substantial penalty for late filing, and these late forms are now visible from within efast...

My questions are as follows-

1) Will the fact that I submitted late 5500-SF forms to the efast website trigger an audit?

2) Will I be charged a penalty? And if so, is there a way I can pay any fees in a advance of receiving a bill from the govt? I noticed in the DFVCP penalty calculator it states "Form 5500-EZ filers are not eligible for the DFVC program." which concerns me greatly...

I have yet to receive any late filing notice but I fear the clock might be ticking...

Any advice would be appreciated!!

My husband divorced and we had a QDRO.  He passed away and never named a new person on his life insurance or the 401k.  Neither one of us married, he had no children. Does it go to me his ex wife 

Assume A and B are participants under ESOP and that A and B have combined $100K of cash in their ESOP accounts.  A and B sell shares to the ESOP and they both elect 1042 tax treatment on all of the shares sold.

Is there anyway that the ESOP can use the $100K cash in A's and B's accounts in this transaction?

I'm thinking the answer is No. Reasoning that because A and B elected 1042 for all of their sold shares, there would be no shares to allocate to their individual accounts for the $100K. In other words, if we took the $100K out of their accounts to help fund the ESOP purchase, we'd have to be able to allocate something back to their accounts, presumably shares acquired by the ESOP in the transaction. But, there would be nothing we could allocate back to their accounts because all of the acquired shares are 1042 stock.  

So, it seems to me that the $100K just needs to stay earmarked in their accounts. The ESOP can use the cash in other ESOP participants' accounts to purchase the shares, but A and B stay in cash.

Thoughts? Thank you. 

Client has 6 month continuous service for eligibility. The FT Williams adoption agreement says 6 consecutive months of continuous service( not to exceed 12 hours of service fail safe applies.). I've never seen this before. Would the service spanning rule apply in this case?

Is a corrective contribution required for a former participant who has taken a complete distribution and no longer has an account in the plan?   

Section 6.02(5)(b) of Rev. Proc. 2016-51 states, "Corrective contributions are required to be made with respect to a participant with an account under the plan."  But I cannot find anything specifically addressing individuals without an account.  

Thanks in advance!

I struggle with this particular scenario.

Plan has a 90 day service requirement and monthly entry dates.  Plan includes rule of parity provisions, but not a one year hold out rule.    Plan further provides that eligible employees who had not satisfied the eligibility requirements will become a participant in accordance with the requirements of the plan.  Employee is not treated as  a new hire unless service is disregarded under the Rule of Parity provisions.

Employee completes 45 days of service prior to terminating.   Employee is rehired 2 years later.

Employee was gone more than 12 months so I don't that service spanning applies.  There isn't any service is excluded under the Rule of Parity.  My understanding is that since service spanning doesn't apply and that since no service is excluded the rehired employee must work 45 more days and then enters on the first day of the month after that.

Does that sound correct or am I missing something? 

Thank you for any guidance.

I am unclear on whether a pre-approved plan needs to be updated for qualification requirements prior to the plan sponsor terminating the plan.

A favorable Determination Letter was received for the pre-approved plan for the 2nd remedial cycle (addressing the 2010 Cumulative List of Changes).  Does it need to be updated for the 2017 Cumulative List prior to termination?

Client took a loan, which subsequently was deemed.  Five years later, he paid it back so he could take another loan.  The client is 59 ½ and tried to take an in-service distribution of the remaining account value.  He was denied the full distribution amount due to the deemed amount that was paid back not being eligible for in-service withdrawal.  Has anyone heard of this before?

Client has a plan with age 21 and 6 months of continuous service. They have a discretionary match which has been typically $2,000 per participant.

They will be hiring some employees on a part-time basis( 24 hours a week) and want to know if they can "pro-rate'' that $2,000 match for these part-time employees. That is, they feel someone who only works 24 hours a week should not receive the same match as those who work 40 hours a week.

I'm thinking that maybe they should just go to a certain percentage of pay instead. Any other suggestions?

We are offering Voluntary Life benefits in increments of 10,000.00 to employees, and their spouses. These benefits are 100% paid for by the employee with no tax benefit. If an employee wants to add their domestic partner, would the employee paid voluntary life premium have any tax implications?

-John

Does anyone have a control group worksheet/spreadsheet they would be willing to share that looks at more than 5 entities ownership at one time?  Thank you in advance.

A participant requested a hardship distribution to buy out his soon to be ex-spouse from their half of the principal residence.  There is no DRO involved here at this point.  The plan sponsor indicated they didn't see any problem with this request as a "purchase of principal residence" purpose for hardship.  The Plan Sponsor believes this is a purchase of his principal residence from the other owner.  I can't find anything anywhere to substantiate accepting or rejecting this request to use the funds to purchase a principal residence.

I realize a DRO request is the way to go here instead for a lot of reasons, but my question is can a participant request and obtain a "hardship" withdrawal to buy out a second owner of a principal residence?  He will be 100% owner at the end of the transaction.  What do you think?

I have seen more than a few Cash Balance Plans that require either 1,000 hours of service or employment on last day of the plan year to receive an accrual for that year.  I can't think of any plans I have seen that require both 1,000 hours and last day of the PY.  Is that permissible in a CB plan?  Can a CB plan just require last day of PY with no hours requirement?  I am not aware of any rule that says a plan can't do this, but for some reason doubt is creeping in.  

I would like to find out how others handle this issue.  Let's say that for whatever reason too much money has been deposited into the Deferral source at the end of the Plan year.  Perhaps it was a duplicate payroll submission or an error in the amount submitted.  Let's say that it was definitely not an intentional prefunding.  

Do you simply allow those amounts to stay in the participant's account and be used to reduce the next required 401k deposits?  (I didn't think that this was permitted).    Do you require the employer to allocate as a discretionary contribution? Do you move the funds to a suspense account to be used to reduce a future Employer contribution, but not an employee deferral?  Do you move to suspense and first use to offset any current year receivable of ER contributions?

Thank you