austin3515

yeah it was a credit card limit. the fee was $4,000 so that was pushing them over their cap.

Funny you say that because I did ask him to try the ACH method. I was also surprised that it even let him pay with a credit card with no apparent mark up since Uncle Visa would take a cut.

I have a client who has not been able to process his payment since Friday, and has a tried a few times. Anyone know if the site is down? He finishes entering all of his info on the DOL side, he goes to the IRS pay.gov site and enters all of his credit card information and then it tells him there was an error processing.

If you call a lack of guidance hypochondria then sure I'm a hypochondriac. We've seen the IRS side in favor whatever their deepest convictions are of the meaning of something (whether we agree with them or not (best example was that QNECs couldn't be funded with forfeitures)) with zero regard for what is practical and/or. So I'll feel better when I hear it from them. Now if you'll excuse me I have a hang nail and I believe it requires some stitches so I've just called an ambulance 🤪.

I never started a thread like this for any other legislation. This is different. It's insane. It's impractical. I promise you when I tell clients they have to auto enroll and auto increase participants they are not going to start a plan. Heck half of my new start-ups are SH Match based on the idea that participation will be lousy. That and the fact that automatic enrollment is completely beyond the <50 population. I have clients with 300 employees who could not handle auto enrollment (generally because they have enormous amounts of turnover). We are not overreacting. IT is every bit as bad as we say.

That is the case as far as I know. If you contribute $15,000 and have $5,000 recharacterized as catch-up, you need to be taxed on the $5,000 AND have the money moved to the Roth source. It's on the list of bazaaro world requirements. Am I wrong about that? I hope so!

Good call! The train has indeed left the station!

I'm a little nervous that so many people are factoring this in for retirement... Someone in my office is saying the same thing. There might be a mass exodus of talent as a result of this too. Quite frankly if I was 64 I'd probably retire too.

The poor recordkeepers and payroll providers have to program their systems starting now to be live 1/1/2024 with no guidance. And since we STILL have no guidance on the LTPT rules I am not optimistic that the guidance will reach us in any sort of time frame that will be of any use when we most need it. We need it by the end of April at the latest. This LTPT thing especially needs tons of clarifications.

Absolutely perfect choice of words.

Listening to a presentation today on SECURE 2.0 and I left with the impression that this is literally impossible to implement. Anyone else? Between Roth as catch-ups, match as Roth, mandatory auto enrollment (with Auto Increase to boot), 37 new distribution options that you can only take once every 3 years. Sure I'm exaggerating but only a little. I just can't see implementing this stuff with a small service business that has 25 employees.

That was helpful!!

Mine was a copy/paste from an article FYI

OK but at what point does the plan administrator conclude tey do not have actual knowledge to the cotnrary? If I was a 3(16) I would conclude it doesn;t make any sense for me to opine on the actual knowledge to the contrary piece because why would I? Anyway I love this new provision and I can;t wait to find out how to use it!

Of note here is that the plan administrator must therefore be the one signing off on these distributions. Not sure how that will go over with the folks who went down the 3(16) rabbit hole (we did not).

Oh believe me, I'm all over adopting this. No way it makes sense for the client to incur the extra time and expense (and embarrassment) of validating these things.

Effective immediately (Well at least for calendar year plans) are we no longer required to obtain any support at all for hardships? The conversation will be "How much do you need?" "$5,000" "Are you able to certify it is for one of these pre-approved hardships things?" If they say yes, they are eligible and that is that, right? Literally anyone can take a distribution for any reason at any time as long as they are comfortable lying through their teeth to get the money they desperately need (at least as they would define that), right? Does something bad happen to them if they lie? Is it subject to any audit at all? Hardship Distributions. Current law allows distributions on account of immediate and heavy financial need or an unforeseeable emergency, and the amount must be limited to the amount necessary to satisfy the financial need. Certain listed events are deemed to be on account of hardship, and employees are required to submit records documenting the safe harbor event. Effective for plan years beginning after December 29, 2022, plan administrators can rely on employee self-certification that they experienced a safe harbor event and that the requested amount does not exceed the amount required to satisfy the financial need.

It's going to take more than a year to sort all of this out won't it? Maybe it's just me but I predict a ton of people making catch-ups on a pre-tax basis who were only eligible to make Roth catch-ups. I just don't think payroll software is programmed with a "lookback" feature to determine who is pre-tax catch-up eligible or not. I can't think of a single other payroll item where a "lookback" is required. It may sound simple but the mere act of a payroll software program going into a prior year to look at year-to-date pay (415 pay in particular no less) to check for this catch-up eligibility seems incredible. OK fine maybe ADP and PayChex will pull this off, but I just can't see Quickbooks doing it. This is really going to be an operational disaster.

Let's say a 457f plan says participants balance becomes vested at age 55. The participant is currently 50. Can the plan be amended (At the employers election) to become vested at age 54 instead? What about 53? Is this strictly forbidden no matter what, or can these kinds of changes be made within certain parameters?

I thought the point of the recently law change was to faciliate people being able to contribute earlier. You want that to happen, you can't penalize employers for doing it. And I rather think the consequence (perhaps not the intention) is to disadvantage employers who are smaller and who happen to employ lower paid people. The assumption baked in to this rule is that CPA firms are "good" employers because they pay their average employee $85K (making up numbers) while the average Fast Food Joint pays $15 an hour (the former of course is rarely top-heavy because the contribution levels among the non-owners is generally substantial). The owner of Fast Food Joint that sponsors a top-heavy SH Match plan requires punishment for being "Bad". The real irony of course is that if they try to good a thing by allowing their own contributions from date of hire, they get punished. That is just bazaar to me. Really bazaar.

Are we on the same page that a top-heavy Safe Harbor Match Plan would not amend their eligiblity to make it more generous because even though there is no top-heavy minimum due for people with less than a year, there is for people with more than a year? Smaller Safe Harbor Match plans are generally top-heavy. Why? The reason they are safe harbor match in the first place is because the owners participate and the employees do not. So top-heavy comes at these plans pretty PDQ. This would be a ridiculous oversight making this relief probably 1/3 as impactful as it otherwise might have been. Maybe less.

https://www.irs.gov/pub/irs-prior/fw4r--2022.pdf OK it's not horrible but it's an extra piece of paper. I suppose maybe they want people to know what their marginal rate is when they make the election? OR will the Empower's and John Hancocks just modify their forms to avoid this?

Transmeroca sent out a piece indicating tha the IRS now requires W4R every time someone wants to increase their withholding. Can that be right?? Those forms are notoriously nonsensical.

Looking forward to confirmation that this will be a real thing and not a teaser!!

Congress intended to allow plan sponsors of small top-heavy plans to allow their hardworking employees to contribute from their date of hire. If the IRS does not bear this in mind when analyzing this language it would be most unfortunate working Americans. To me if you are exempt from (A) and (B) you have met the requirements. If there is any doubt about this the IRS needs to tell us ASAP since these LTP rules are effective 1/1/2024. Just so everyone understands the implication of CB Zeller's conclusion, this new rule is practically worthless for safe harbor MATCH plans trying to avail themselves of the exemption: That's because if you have immediate eligibility for 401k and a 1 year wait for the match, now anyone with more than a year has to get the 3% top-heavy minimum. No one in their right mind would do this. IF they would they would just have the 3% nonelective. Not a single solitary top-heavy safe harbor match plan will amend to liberalize 401k eligibility if relief does not apply. Not sure what the point was.