Hello,

Newbie to this forum so please forgive my ignorance on this issue.  I recently retired from the military and moved back home to help my aging mother.  I will try keep this short and to the point.

My mother is currently 71, married and lives in NC.

I recently looked at divorce paperwork from an earlier marriage she was involved in where the separation agreement was filed in a CO district court in 1991.

Her ex spouse is a cardiologist in CO, still practicing and part owner in the very large practice.

In the separation agreement I discovered a QDRO was to be used to ensure my mother received $25,000 from the practice's pension plan.  

My mother did trust this man and they split on good terms, but she simply relied on him to make sure he complied with the terms of the agreement.  When I recently asked, she was unaware she was entitled to the $25k and confirmed she never received it.  She also did not have a lawyer.  The doctor had the paperwork prepared by his and she  just showed up and signed.  I know it was not the smartest thing for her to do but I was too young to know better at the time and she really had no idea either.

Again the doctor's practice is alive and well today, but they have added a word to name of the practice.  The pension plan also exists under a slightly different name from what comes back in a google search and has substantial assets.

Needless to say, this guy is easily a millionaire several times over by now and my mom deserves what she's entitled to.

How should I go about collecting on this QDRO?  

My thoughts on how to proceed:

1 - send the doctor a letter (with a copy of the separation agreement)  and ask him if he just wants to write a check and be done with it

or

2 - use a lawyer to collect (less desirable)

I appreciate your time and any and all ideas you may have to help.  Thank you.

We are receiving conflicting answers on due-date of 1096/1099R to IRS.

Some accountants maintain 2/28. others are saying the rules changed for 2016 to 1/31/2017.

Which is correct???

Would it be permissible for a SH Basic Match Plan to allocate a discretionary match in a nonuniform manner where the owners get a lesser benefit than all the other participants? For example could the owners get a match equal to 40% of the 1st 100% where the other participants get a match equal to 70% of the 1st 100%?

I looked in the EOB and the EOB seems to suggest that it is possible, but it would be subject to BRF nondiscrimination testing. 

Thanks in advance!!

Hi,
Employee of Sports Authority participated for a number of years in deferred compensation plan. FICA and Medicare was withheld from the deferred comp.

SA went bankrupt in 2016.  Deferred comp is a total loss.  Is there any type of tax deduction/writeoff on the personal federal tax return for the withholding and contributions?  If so, how?

Thank you.
Keith

I'm trying to figure out how DATAIR generates the Permitted Disparity Factor (for DB portion). Is there a table that is referenced? I thought it was based purely on Retirement Age, but it looks like the participant's age also has an effect. Depending on these two variables, I get a value between 0.32% and 1.1%.

The calculation seems strange to me as it increases up to 1.1% if the retirement age is 70, but then drops down to 0.75% if the retirement age is 71 or later. Does anyone know if these calculations are correct? I read somewhere that the max rate should be 0.75%, which is why I'm questioning the accuracy. If so, could you please provide the table that's being referenced?

Thanks.

Let's say the participant elected to defer a bonus payment, but the company did not deduct the deferral or match attributable to that. I have a couple questions:

1) Does the missed deferral get categorized as QNEC or "Deferral"? Would it be attributable to the year in which the missed deferral should have taken place for Form 5500 purposes (accrual basis)?

2) Does the missed match get categorized as QNEC or "Match"?

Thanks in advance.

Employee received too much match from too much compensation.  The calculation of the match did not stop at 265,000.  Employer thought the 265,000 was only for the safe harbor calculation....lol.  The employee received his 2% match on 444,000...

I need to remove the extra match and place into unallocated acct.

The employer was questioning if they could reallocate the extra match as an employer non-elected contribution for 2016?

Is this permissible?

(I didn't use the term forfeiture because I don't think this is a forfeiture situation)

Can a TPA require the participant sign a distribution form to process an RMD or is the plan sponsor required to pay them out automatically even without a response from the participant.

Company was sold.  All employees except the owner are terminated at the end of February.  The owner is keeping corporation active until the end of the year.  New company did not take over plan, nor corporation, but in hiring some of the employees to work for them.

Plan is cross tested.  3% SH 2% Gateway.

Owner wants to max out for 2017.  He has some income from shutting down the business and will continue to pay himself. 

Any problem with giving the employees their 5% on their 2 month salary and the owner getting maxed out at year end.

He wants to deposit  the 5% so that participants can get paid out.

So if he continues until the end of the year, we avoid the Short Plan Year reduction in the limits?

Am I missing something here?

One of my clients is having their 401(k) plan audited by the IRS.  We are close to concluding Audit CAP with a certain operation error that was discovered during the audit and the agent has asked us to extend the limitations period.  I arranged to have the necessary forms (Forms 56 and 872-H) signed by the client and sent to the IRS.  The agent has gotten back and says that they want an extension for the next succeeding year, which we are inclined to grant them.  The only problem is that I cannot locate a link to the Form 872-H on the IRS website or on any of the Google searches I have run.  Could someone please help by providing a link to the form.  The version that was signed for the earlier year was last updated in April 2012.

I have a general question about Bottom Up QNECs. Does the employer have to give the QNEC to the lowest paid employees first or can the employer pick and choose the employees that receive the QNEC?

Thanks,

Client receives letter for typical 5500 Audit for 2015 Plan Year (calendar year).  Form filed was Form 5500-EZ for Owner & Spouse.  During audit it was discovered that data submitted by Client does not tie into W-2 of Spouse.  Looking back it is determined of the years back to plan inception (2007), only 2 years tie into the Spouse's actual W-2 for that year.  During the other years the Spouse's income was slightly overstated by $1,400.  Result is that monies allocated in those years exceed maximum deductible contribution.

Question:  Is related penalty tax only applicable for 3 years back, and does that mean 2015, 2014, 2013 and 2012?

Sorry, not my usual area and our in-house expert is unavailable so please forgive what is likely an ignorant question.  If employer with self-insured plan uses look-back method for determining full-time status and has an executive who is stepping down and curtailing hours significantly (so will still be a salaried employee but only working 15 or so hours a week), can they use the look back method to extend full-time status through the stability period and not have to provide COBRA to them until they lose full time status after end of the stability period even though they are clearly in a part-time position?

I know the rules are generally aimed at making sure employees get a chance at full time status and coverage if hours may fall below but here they are basically using the rule to provide extended coverage to a form HCE.  If that's the way the rule works though, I suppose no 105(h) issue if everybody (NHCEs and HCEs) all get treated the same?

Thanks  

I contacted a client who is delinquent in sending their census information for 2016. It's a safe harbor plan, so testing refunds are not a concern. I asked about a tax return extension to decide if I needed to be concerned about the getting them contribution numbers by March 15.

During 2016 the plan sponsor was bought out. They responded by saying that the new owner is a sovereign nation and does not file a tax return. Based on questions that they asked before the buy out, I know that this is somehow related to being owned by a native American tribe. But it is a payday loan company and not in any way related to tribal government.

Do any of you who are more tax savvy than me have any idea what they're talking about?

I'm working on a calculation of employer match for a self-employed participant/plan.  The plan has 10 common law employees.  We're transitioning from one software provider to another.  The provider we've used for many years, includes the salary deferrals of the participants in the common law plan cost.  The new software provider only includes the employer match in the common law plan cost.  While this doesn't impact my match calculation directly, it does impact the resulting plan compensation for the my self-employed.  So my question is, which software provider is correct?  I've not had any luck doing a search to see if this has come up before and reading the SE instructions hasn't been helpful either.  Thanks.

Where in the regs say that you can test by "carving out" the otherwise excludable NCHEs and test the otherwise excludable HCEs with the Nonexcludables?

(I'm too lazy to look for it, and I was hoping someone would have it in their memory and at their finger tips.  I'm not asking anyone to go out of their way and do work for me.  Only post it up if it'll only take but a moment.  Thanks.)

Hi,

I don't usually work with Defined Benefit plans. Could someone please confirm if the RMD dates are different for DB plans than for DC plans? Is the RBD April 1st of the year following the year in which the first RMD is required and then it switches to December 31st of each year after that?

Thank you.

There is an audited plan with 700 employees. They have a matching contribution. It is calculated on a pay period basis.  Client would like to convert to matching on year-to-date minus prior (ie true up).

Reason is they have some sales people who receive bonuses near the end of the year, in which they max their 401k contribution. Due to pay period, they don't receive a full match and they want their salespeople to receive higher matching dollars. This would impact approximately 10 HCE's and 100 NHCE's. Obviously the HCE's affected would be getting more matching dollars than the average NHCE. 

Can the 2016 plan year be amended in 2017 to change how the match is calculated? Assume it is not a discretionary match.

An ER incorrectly contributes to a 401(k) plan an amount that is in excess of the amount that the EE elected. This happens once, and the correct amount is withheld and contributed in the next payroll period.  The error appears to have been made when the first deferral election on file was not cancelled after a second deferral election was made.

What is the best way to make the correction?  Should the amount be returned to the EE from the plan (as compensation)?  I can find nothing in EPCRS that addresses this situation.  There is no excess deferral, just a one-time human (or perhaps computer) error.

Question:  Plan has a quarterly matching contribution with a requirement that participants must be employed on the last day of the quarter to get the match for that quarter. Problem is they might match one or two quarters during the year.

Anyone have any suggestions for how to run coverage?  Can I treat anyone employed on 3/31/2016 as benefitting in the Plan, even if there was no match in that quarter?  What is someone terminated 4/15/2016, but there was no match until the 3rd quarter? Can I treat that employee as benefitting?