Employer maintains a profit sharing plan, no employees.

Box 1 of his W-2 includes health insurance premiums; boxes 3 & 5 do not.

Employer wants max deduction (and who doesn't?)

Would his 25% be based on Box 1 or Box 3?

Accountant seems to think Box 3.

7-31-17 year end plan

Participant over 50 deposits max  DC plan limit profit sharing during the plan year as well as $8000 salary deferrals.

Per calendar-year his deferrals are below the calendar year catch-up limit each year, however during the plan year they are as stated above. 

Because he exceeded the 415 limit instead of the 402(g) limit, must I limit his catch-up to 6,000 for the plan year?  Or may I assign the "catch-up" contributions to the year they were deferred  (thus, allowing all of his contributions for the plan year).

Most threads I have seen regarding fiscal year catch-up are tied to 402(g) limits and ADP corrections, so thank you in advance for answering if previously discussed.

A client filed a 5330 to pay an excise tax for unpaid minimum contributions.  The client received a Notice CP-220 that assesses an adjustment to the excise tax.  We have no idea how the IRS got its numbers, and we want to appeal.  There is nothing on the face of the notice that explains how to appeal.  Does anybody know how?  Do we just write back to the address on the notice and say we want to appeal?  

A Plan became an Eligible Automatic Contribution Arrangement (EACA) under IRC 414(w) effective January 1, 2015. The plan document states that only employees hired after January 1, 2015 are covered employees under the EACA.

Several years later, the plan sponsor determines that they now want to amend the plan document effective October 1, 2018 to change the covered employees under the EACA to be all employees that do not have an affirmative deferral rate election. This is sometimes referred to as a lookback or sweepback. As a result of the lookback, employees that were hired prior to January 1, 2015 and who have never made an affirmative deferral rate election will now become covered employees and enrolled at the plan's default deferral rate.

It does not appear that Treasury Regulation 1.414(w)-1(b)(3)(iii)(A) directly addresses the EACA notice requirement for the those who will receive their initial EACA notice as a result of the lookback . When must employees impacted by the October 1, 2018 lookback receive their initial EACA Notice?

1) Within a reasonable period of time prior to the beginning of the 2018 plan year (ie - in November, 2017). If this is the correct interpretation, it virtually eliminates mid-year lookbacks to EACA's as the decision by the plan sponsor to implement a lookback won't be made by that time.

OR

2) Within a reasonable period of time prior to the date that the employees with no affirmative deferral rate election become a covered employee under the EACA (ie - within a reasonable period of time prior to October 1, 2018).

I have a new client that is a governmental entity that sponsors a 457(b) plan for its employees.  An employee has attained normal retirement age under the plan and retired.  He did not take a distribution at retirement.  Four months later, the individual is re-employed in a part-time position which makes him ineligible for contributing to the 457(b) plan.  The employee has now asked for a distribution from the 457(b) plan. 

The plan provides that upon severance from employment with the entity, a participant shall be entitled to receive a distribution of his account.  Severance from employment is defined as a voluntary or involuntary termination of employment. 

The regulations under 457 provide that an employee has a severance from employment with the eligible employer if the employee dies, retires, or otherwise has a severance from employment with the eligible employer, and directs one to see the 401(k) regulations for additional guidance concerning severance from employment. 

Because of the individual’s status as a rehired employee, and the reference to the 401(k) regulations, I am concluding that his rehired status makes him ineligible for a distribution now.  I am being told that in the past the client has taken the position that a “retirement” is sufficient to allow for subsequent distributions, even while the individual is working for the entity as a part-time employee.  I can’t find any guidance on 457 plans that would allow for a distribution based on the prior retirement when the individual is currently working for the entity, and I am wondering if the group knows of any unofficial IRS guidance on this issue.   

Brain cramp - PS has 1 YOS/1,000 eligibility. SH nonelective is provided to anyone eligible to defer, which is everyone. If someone has never worked 1,000 hours, does the fact that they receive 3% nonelective require that they receive gateway? I'm saying no, but second-guessing myself...

P.S. - my thinking for "no" is that they can be disaggregated as statutorily excludable.

I had to do an 11-g amendment to give benefits to one person.  Do I have to create an SMM for her?

I would be curious to know if anyone has receiving notification from their Document Provider, as to when the software will be available, to restate DB and CB Plans. Specifically, VS or Prototype.

We have a participant in one of our 401K plans that is requesting a hardship withdrawal that does meet the safe harbor criteria, but he has an outstanding loan.

Does this preclude him from a hardship distribution, since the current loan has not been repaid?

A few 401k participants withdrew their accounts on December 28. They subsequently received a dividend in their 401k account < $100 on December 31.

Is there anything to support saying that they are not in the 5500 participant count as of  the subsequent 1/1/XX?  I assume no, but I wanted to see if anyone has run into this situation in that including them in the count will trigger an audit.

A plan sponsor  has participants that missed 5 months of deferral opportunity due to a technical payroll glitch.

The Sponsor wants to know if the Rolling Three-Month exception can apply to the last 3 months of the missed 5 months, where they would only have to fund a 25% QNEC for the first 2 months and not for the full 5 months.

Rolling Three-Month Exception. The Revenue Procedure converts the existing three-month exception into a rolling three-month provision. So long as elective deferrals commence within three months of when they should have commenced – regardless of where that falls during a plan year – an employer need not make up the missed deferrals. (

can the other spouse if not covered by their own employer plan have their own regular IRA and is it fully deductible ?

Plan Sponsor has old TIAA individual contracts in 403(b) plan.  More than 90 of these contracts belong to terminated participants.  We (the TPA) would like TIAA to take some action to show that these contracts are distributed for 5500 purposes.  Has anyone had experience they could share with this issue?

Thanks!

I have a solo 401(k) participant that has $0 Schedule C compensation and is age 55. Is the allowable deferral $0 or $6,000? 

I cannot seem to find anything on this. 

Thanks!!

I have a plan with 3 partners and a few nhce

3% flexable SH to all ee's.  Plan does not exclude HCE from the safe harbor.  Plan is Top Heavy

they would like to exclude one partner from receiving the safe harbor.  Can you exclude one HCE/Owner from receiving safe harbor in a board resolution and still have safe harbor status?

Plan sponsor wants to split its current SH401(k) (130-ish participants and going up each year)  into two identical plans in order to avoid the audit requirement.  Split could probably be done by placing certain categories of EEs in just one plan.  I'm much more comfortable with this than alphabetical approach, but my understanding is that is that even that is generally considered acceptable.

Here is the wrinkle.  There is also a cash balance plan that is tested with the DC plan.  Does this make splitting the DC plan more complicated?  I had a brief conversation with an actuary and even he was stumped and needed to do some digging. 

Any insight would be greatly appreciated.

Partner in an llc gets a k1 with 70,000+- in net se income. He has w2 income from other companies that have social security withheld.

Does the social security from the w2's affect the calculation of a maximum profit sharing contribution?

Might a plan self-correct a missed deferral opportunity by allowing the participant to deposit an amount to the plan equal to the missed deferral amount?

Due to an error in plan sponsor's payroll department, an eligible Highly Compensated Employee's deferral election of $24,000 was not carried over from 2016.  This was not discovered until this past month by the participant's tax accountant who was preparing her 2017 tax return.

Plan sponsor is prepared to self-correct under Rev. Proc. 2016-51 by making a qualified nonelective contribution (QNEC) equal to 25% of the Missed Deferral Opportunity, as adjusted for earnings, and supplying the requisite notice.  However, participant and participant's accountant would prefer to pay $24,000 to the plan and have the plan sponsor issue an amended W-2.  Plan sponsor is agreeable, since would save them the cost of the $6,000 QNEC.  However, my initial reaction is that such a deposit would fail to meet the definition of an elective deferral.  While it might be argued that the contribution will be made "pursuant to a cash or deferred election under a cash or deferred arrangement," I don't see how it can be categorized as an "employer contribution."

ACP test fails and we are now past the end of the following plan year - the statutory correction period. Therefore, sponsor is doing the one-for-one method via self correction. Correction method and plan document allow for forfeiture of non-vested match, but vested as of when - the end of the plan year to which the excess was attributable or as of the date of corrective distribution (for those vested)?

Is there any issue to make a QDRO Distribution to Ex-spouse in the form of Partial Lump Sum  in Cash and the remaining amount as a Direct Rollover?

It is my understanding that there is not going to be the 10% tax penalty for a QDRO distribution under age 59 1/2 if it is made from a qualified plan unlike if it was from IRA.