Bird

How do you get a credit if you don't amend the prior return? I've seen a couple of articles/blurbs and it is pretty clear that you have to amend your prior return(s) to get the refund (or credit against then-current taxes I suppose).

If it is not addressed in the loan policy then I'd say you are free to do what seems reasonable. I think it is reasonable to allow the payoff. I can't imagine any consequences as long as it is not in direct contradiction to plan terms/loan policy.

I believe you are correct. If you look at the Schedule SE and the 1040 it is pretty clear they are developed separately - neither the partner's pension deduction not the health insurance deduction are factors in the SE tax.

The idea would be that you could amend your returns and get the tax money back. I don't believe the intent is to be creating after-tax basis and have no idea how a plan would know that someone essentially didn't claim it as a rollover; I assume they would have to confirm that it is (just like they do with a regular rollover). Forget about the CARES Act for a sec and imagine if someone rolled money over, confirmed it was a rollover, but paid the tax on it...not the plan's problem.

I agree

Well you can't amend a DB to have in-service before age 59 1/2.

That was text of instructions forwarded by an accountant. I didn't see the actual instructions. The worksheet itself has Innovative Financing Solutions in the corner, and they are apparently some sort of intermediary. I believe the instructions came from them. https://www.innovativefinancingsolutions.net/

No and no. A courtesy notice maybe. In my own plan, my accountant tells me to adopt a resolution confirming the PS that was done (we don't do matching contributions) so it might make sense to have an end of year reso that says "whatever we did is approved."

Do the recordkeepers have a system for accepting/processing this? Seems like you're asking for extra work if you try to do anything before the dust settles somewhat.

Text from instructions for the loan is pasted below. I'm not sure if it was for a particular lender or generic from the gov't. I had highlighted "match" b/c I don't think it is to be taken literally. Note that any salary (and presumably retirement plan contributions) is subtracted. We are generally providing actual contributions made, regardless of the year they are "for." I wouldn't lose sleep over any of this. "Close enough for government work" definitely applies IMO. (4) Retirement plan funding the employer made for employees for the period of January 1, 2019 to current for the following types of plans if applicable (will need funding noted by employee): Profit sharing 401(k) plans, Cash balance plans, SIMPLE and SEP IRAs If your plan administration has been completed, please send a copy of your Form 5500 for 2019 and report showing employer match by employee Employees’ own 401(k) salary deferrals won’t count for these purposes

I wasn't suggesting they didn't have to be in the physical presence...but we know that it happens. I am very clear with my sponsors that if they have any concerns about the spouse challenging any of this, force them to get a notary. A little common sense goes a long way.

My inclination is to use Code 1 and assume such matters will be dealt with on the tax return. Or ask the investment provider how it should be handled.

The regs say plan representative or notary public

Yes. I see nothing in the legislation (or reason) it wouldn't be.

Pretty much how I read it, although from the way it was presented I thought it was some other kind of direct seller. We looked into the possibility of this once for a real estate agency and decided it was "not worth it" (polite terminology for "insane").

Mike of course is correct. My answer was incomplete.

That certainly implies, or maybe proves, that Fidelity was acting in some kind of "Administrator" capacity. How they could deny responsibility is beyond me, except for the fact that they are Fidelity and probably have as a corporate culture "deny, deny, attack." Oh wait, that's somebody else. I'm working with someone and getting this type of response. In our case it is helpful. In your case, it is an incredible weakness in their system. Make sure it is writing so they can be on the hook too for improperly denying providing an SPD. The collective stupidity here is staggering. Once you get the lawyers involved that should get Fidelity's attention. They're just hoping to make it so difficult that the wife gives up.

So they'd be SH for part of the year, stop, then retroactively be SH again by amending under the SECURE Act provisions? That's an interesting thought. My initial reaction is no but with the ability to retroactively become SH, maybe...I wonder if you'd have to somehow overlap b/c the amended SH has to cover the whole year.

So how many are really affected and how much is this really costing your client (the guy getting the windfall)? Someone there less than 6 years can't have that huge of an account balance. I'm not trying to be nasty or snarky, but imagine you work for the IRS in whatever department gets to give this guidance. People (like you) are constantly asking for details/specifics about how to handle certain situations. So you come up with something that is somewhat reasonable; maybe it isn't perfect but at least it gives us some guidelines. But you don't like how it works in certain situations so you want an exception or different guidance. You (they) can't keep making rules on the fly. Would you rather have less guidance and have to give an opinion to your client about how to handle this situation, not knowing if you're even close to what might be acceptable? I say be happy with the reasonably bright line, deliver the bad news to the client, and you can hate on the IRS together. At least you know where you stand.

The merged in plan ceases to exist. Typically, participants in that plan would now participate in the new plan as of 1/1/20 like any other participant in the new plan. I see no need to test on something that doesn't exist.

No, the merging in plan does not need to sync to the same plan year end. The plan merging in just files a short year return for the period 1/1/20 - date of merger, if that is in fact necessary...that date of merger can be an art form. I've generally taken the position that if the documentation says the plans were merged "as of 12/31/19" but the actual transfer of assets occurred in early January, that the final return is for the 2019 year and the assets belong to the new plan then (12/31) even if they weren't physically moved until later. Not the biggest deal to file a short year return if the documentation calls for it. What does the merger documentation say?

Unless "this title" doesn't apply (and I am genuinely unsure that it does but am 99% sure that these people are not employees for retirement plan purposes) the answer is pretty clear (my emphasis). (a)General ruleFor purposes of this title, in the case of services performed as a qualified real estate agent or as a direct seller— (1) the individual performing such services shall not be treated as an employee, and (2) the person for whom such services are performed shall not be treated as an employer.

I think it matters (NE vs match), at least in terms of how they are stated in the document. Match for sure has to be hard-coded at the beginning of the year, and no, I don't see any way to turn it off and back on. If your nonelective is hard-coded* then the answer would be similar. If your NE is of the "maybe" type (or not in the document at all thanks to the SECURE Act) you can turn it on in November (or after the end of the year to the tune of 4%). *All of our plans (except maybe 1) use the maybe provisions. Am I missing something about hard-coded provisions and the SECURE Act...? It did not void them, it just made it so you could add SHNE provisions during the year, and don't have to give the notice. So a hard-coded SHNE is just that, hard-coded, and the only difference is that you don't have to give the notice. Stopping it requires the "maybe not" notice or business hardship, correct?

I understood that the 5 year period was extended. Since interest accrues, you are right about reamortizing otherwise it won't be paid off at the end of the extended period. I don't know about the "even if payments were doubled" part.

There is a certain hassle factor and cost to all of this. In my world, "a small business completely unaffected by the virus so far" would not be adding any coranavirus provisions and thus wouldn't have to consider this Q.