I've gotten conflicting answers to this, so I wanted to get some clarity.  Does the IRS allow for in-service distributions of 401(k) contributions under age 59.5?  Specifically, the person is trying to roll the money into an IRA.

The current Plan Document does not allow it, but the employer is willing to amend it if allowed.

If someone direct me to exactly where in the code it says it, I'd appreciate it!  

We have a key employee (5% owner) whose wife passed in late 2014.  He took distribution of her account balance in 2015 and rolled it over within the same plan.  Would the distribution from her account to his be considered a "related" rollover for calculating top-heavy status as the $ remains in the plan?  If yes, would it drop off after 1 year?

If an Employer wants to pay a former employee's health premiums, first COBRA, and then after COBRA ends, whatever it costs for the employee to get health coverage, how are payments of those premiums treated for tax purposes? I know premiums paid for COBRA are nontaxable if the Company pays directly or pays to former employee upon proof of payment to insurance company, but if the Company continues to pay the former employee's premiums after COBRA ended, how is that treated?  Is that income, subject to a 1099 or something like that? 

From the form 5500 instructions the IRS writes this:

A “one-participant plan” is:

(1)     a pension benefit plan that covers only an individual or an individual and his or her spouse who wholly own a trade or business, whether incorporated or unincorporated;

(2)      or a pension benefit plan for a partnership that covers only the partners or the partners and the partners’ spouses. Thus, a “one-participant plan” can cover more than one participant.

 

On the other hand, merely covering only one participant does not make you eligible to file as a “one-participant plan” unless you are one of the types of plans described above. 

A CPA is saying that his client who has 1 employee who works 10 hours a week and does not meet the 1,000 hour requirement would still be eligible to file a form 5500EZ.  Based on the above that would not be the case.

Simple answer.. EZ eligible or not?

Hi,

New potential client wants to start a 401k plan. Client is a day care/ pre-school located within a church. The church looks upon the day care as a "ministry" of the church. They use the same EIN as the church but their fiscal year is different. Is there anything special that needs to be done for the set up? Shouldn't they have their EIN?

Thank you!

Hello, this is my first post and my question I would like to pose is this:

Currently in our area, we only have 2 firms that we are able to choose from to provide a 401k. One is a A) SEC-registered firm that is not as established, and the other is B), a non-SEC registered firm (it used to be but decided not to) and have over 100 million in assets.  

I feel very uncomfortable going with the non-SEC registered firm because the SEC website shows they are nonexempt. (They claim they are not required to be since they are trust company that falls under the definition of bank.)  However the other decision makers don't see it as a significant issue. What am I missing here? It seems clear cut at least on this stance but they are willing to take the liability.  

401k plan excludes DOP comp only.  Can/should comp payments to 409a plan be included as compensation for 401k plan?

I know there is a correction method for when an employer maintains a SIMPLE Plan during a year or years when it becomes ineligible to do so.

Has anyone ever encountered a situation when an employer was ineligible to adopt a SIMPLE Plan from the outset but did so anyway and now, 10 years later, realizes there is a problem?

Any suggestions?

 

 

I am looking for a book that has sample forms, letters, amendments ect in it.

I knew of one many years back but can't find the name.  Does anyone know of a good one?

On a side note does anyone have a sample spinoff amendment they would be willing to share?

We are a small TPA firm located in Eastern Suffolk County, NY looking to work with another small TPA firm.  We are open to merging with or purchasing another small TPA firm on Long Island.  We would also consider other options, if presented.

If anyone is interested in exploring growth opportunities with us, please email TPAexplorer@gmail.com.

 

Single-member LLC dentist sponsored a SIMPLE IRA for about 8 years.  He sold his practice mid-2018 and all employees now work for the new dentist's company.   What happens to the SIMPLE IRA accounts?  Should notices be provided to the employees or to the custodian of the SIMPLE IRA accounts? Could the new dentist assume sponsorship of the SIMPLE IRA or would he need to start a new plan if he wants one?

Thanks!

We have been hired to file "unfiled/past" 5500EZ forms but we don't know which returns have been filed since 1996. We would like to find a way to get copies of prior EZ returns so we know which ones haven't been filed. We have called the IRS and EBSA without much help. Any ideas?

Background: A Canadian citizen, living in Canada, has elected to start an annuity from his US based 403(b). He has requested that the monthly payment be sent to his bank account in the US, rather than be mailed to his home address in Canada.

Questions:

1) Can the 403(b) plan treat the payments as though they were sent to a US person because the bank is located in the US and consequently apply withholding as though he is a US person?

2) If the payments were being sent to a residential address in the US for the same individual, does that change how we apply withholding?

3) If the answer to one of the above is that we can apply withholding as though he is a US person (married w/3 allowances), do the distributions get reported on a 1099-R or a 1042-S?

Thanks for your help!

Does anyone happen to have an excel spreadsheet template that would calculate match true up on a bi-weekly payroll basis, instead of an annual basis?  Match is .50 for every dollar match up to 8% and payroll is bi-weekly.

Say an employer has a self-insured group health plan. The same plan coverage, waiting period, benefits, etc. are offered to all employees.

If HCIs paid, say, 10% of the cost of coverage and non-HCIs paid 50%, we would violate 105(h). 

If the premium payments by employees remained the same (10% and 50%), but the employer imputed taxable income to the HCIs equal to 40% of the premium, does this solve the 105(h) problem? I know the typical solution in post-termination or COBRA subsidization is to make the premium payment or subsidy taxable. Does this same solution carry over directly to the continuing employment scenario?

Alternatively, the HCIs' base salary could be increased, but the employer wants to avoid having to increase base salaries for optics and other reasons. 

Appreciate any input.

Hi, 

Company has DB and DC (MP) Plans. They planned on making a db and DC contribution for the year ended 12/31/17. Inadvertently they deposited the DC contribution into the DB account (db plus dc contribution all went into db account, and was below DB Max). Can this be self corrected by transfering the money into the dc account? If yes, what if the transfer is made today, October 18th, as this is after 9/15?. Thank you

We are reviewing a 403b plan that has a service based employer base contribution.  The plan year ending 6/30/18 fails NDT due to the HCEs basically maxing out on their 403b deferrals and the NHCEs not deferring very much.  So the NDT failure is with the average benefits test.  If it's possible, the least costly solution would be returning a portion of the HCE 403b deferrals.  Is that possible and more importantly, within the rules??  Thanks.

If an employer uses the arrears method for collecting an employee's obligations for H&W benefits while they are on unpaid LOA and the employer elects to forgive the balance in lieu of collecting the balance is there any way to do that and avoid having to impute income to the employee? If the employee owes a balance and instead of collecting the balance the employer would like to forgive the amount do we have to include the forgiven amount as imputed income on the employee's W-2? Thanks.

Hello.  We have a new client - Client A - that was a participating employer in a MEP who has decided to leave the MEP and establish their own plan.  We have assigned Plan 001 to the client's new plan as it is the first plan being sponsored by client A.  A colleague is questioning why we are using 001 and not 002 for the plan.  Is our reasoning correct on the plan number?