BG5150

Why would I mark it 'final'?

They don't know any better? They think they are giving their EEs a fair choice? Bad advice? Or they truly have a valued Employee who, for perhaps religious reasons, do not want to be invested in interest bearing investments? Or, they have Employees who would lose SSI benefits if they get any sort of allocation to the plan?

Two S-corp owners: the only thing on their W2 was the S-Corp Health Insurance. Does that count for plan comp, or do we exclude it and they have zero comp for the year?

Turns out, it may be an S-corp....

We use an FTW doc, and it's an option in the Adoption Agreement. But, has anyone seen any legals cases where, when the plan failed coverage and was forced to include someone who had opted out and the person sued?

Good point.

And I would ask what exactly the DOL told her, and if she could provide some sort of cite. Maybe you could call the DOL and ask.

Does the document allow for (ir)revocable elections to forsake participation?

The instructions for the SF says who may file the form: The instrux go on further to say those who cannot file the SF must file either 5500 or EZ. The plan in question is only 2 people. So it qualifies under the first bullet. It does not say the plan cannot be a one-participant plan. So why can't we just file the SF?

How would they even know?

They are under $250k ($248, lol) But the've filed SF's in the past b/c they had an employee. I'd rather file some form than just skip it and have to deal with that IRS letter. What's the penalty if they file SF and not EZ?

Do they have to? They may hire someone soon. Will there be a problem going between SF to EZ to SF...?

LLC taxed as partnership

If the plan covers a 100% owner and spouse can/should we use code 3B on the 5500-SF?

The affected deposits, +/- earnings should be refunded to participant and reported on a 2026 1099-R. (Code E, I think, EPCRS correction, so no 10% penalty tax will be assessed.)

I agree. Put it into the form account for use by all participants

I thought non-deductible contributions are allowed in the plan. Or is it that there can be, but a 15% excise tax applies (each year it's in the plan)?

The amount of match in a plan is limited by the max comp allowed for the year. In a case of matching 100% of deferrals up to 2% of pay for 2025 would result in a maximum match of $7,000. It doesn't matter what the person's YTD comp is. You apply the match formula per period (in your example) until $7,000 is reached. THEN it stops. Another way to look at is is: Say this person uniformly earned $700,000 in 2025--half thru June and the other half thru the last 6 months: $350k per half year. What if they didn't start deferring until July 1? Are you not going to give them any match at all? That's absurd.

And what would happen if you test ADP with prior and ACP with current? Will an error be generated if there are two boxes checked for that item?

but will it mess up the interest due otherwise? Will the final payment be off?

The accounts are daily val on Relius.

Participant is due $1.80 in earnings due to a late deposit of a loan payment. How do I process that in Relius? Do I just do a Loan Payment for the participant and only allocate $1.80 in interest? Will that mess up the amortization schedule?

Fromt he IRS website: General rule: Generally, the safe harbor notice must be provided within a reasonable period before the beginning of the plan year. The timing requirement is deemed to be satisfied if the notice is provided at least 30 days (and not more than 90 days) before the beginning of each plan year. If the notice is not provided within this time frame, whether the notice is timely depends upon all of the relevant facts and circumstances. (Emphasis Mine)

Give me a call. I know a guy who can help someone or something 'disappear' 😉

Is there time enough to get the investment accounts properly set up?