BG5150

Peter's .pdf above says it's for plan years beginning after 12/31/2023 The OP says after 12/29/2022 Which is it?

Thanks, Peter. There was similar language on the W-4P BUT: does an election on a W-4P continue over to the new W-4R? To go further, do they HAVE to get a new 4-4R because of the tax tables?

thanks!

Do you have a cite for that?

Do you also advise them that withholding is optional? The W-4R may be optional, but I don't think you can just go ahead and do RMDs without informing the participant her rights at some time. The W-4P/R are good elections in perpetuity until they are changed, so once is good enough. So, once someone fills out a form they should be good to go withholding-wise. Unless the form doesn't say the election stands for any future RMDs. However, I find way too many RMDs just go out with the 10% penalty tax defaulted without any input from the participant. I for one am not comfortable making personal tax decisions for participants.

Notice was given timely until this year.

Plan has been around for four or 5 years and have been SH match all the long. What happens if they give their SH notice on Dec 20 this year? Or January 12, 2023? what are the consequences?

Ah. makes sense.

No partial plan term, as the terminations have to be employer-initiated.

Yes. The W2 shows $20,500. Usually we would issue a 1099 for the excess and earnings with code 8. and let the prior year take care of itself. The IRS site looks like it says we should be issuing 2 1099's.

Participant had 2021 402(g) excess of 1,000. At time of distribution there was $20 in earnings. The IRS says it's taxable in both years. (I knew that). But it also says BOTH amounts are reportable on a 1099-R. I thought just the 2022 amount is reported on a 1099-R (basis and the earnings), but the 2021 overage would be taken care of on the 1040 using the W2. Here's what the IRS site says: Under Revenue Procedure 2021-30, Appendix A, section .04, the permitted correction method is to distribute the excess deferral to the employee and to report the amount as taxable both in the year of deferral and in the year distributed. These amounts are reported on Forms 1099-R. In the case of amounts designated as Roth contributions, the excess deferral will already have been reported in income in the year of deferral. However, the amount will be reported as taxable in the year distributed.

Situation: Plan is Top Heavy 2 HCE, one owner, one not )and non-Key) 2 NCHE owner defers max 2 NHCE defer enough to get 3% match Non-owner (N/O) HCE does not defer at all so no match N/O HCE is due 3% TH contrib. That gets contributed to the discretionary source. Is there a problem here? No NHCE getting a 401(a) allocation.

What's the remedy? Is there any harm in keeping it that way? At the brokerage house, they would have to create all new accounts with a trust id and transfer them from the old accounts. Evidently there's lots of paperwork involved.

Can you do it in a spreadsheet?

"SoloK" is a marketing term. A SoloK plan is just a regular 401(k) plan that happens to only cover owners (and their spouses). Sure, some institutions offer an abbreviated plan document making things a little easier, but once an employee is hired then you have to put the plan on a full-blown document, increasing time and effort on all fronts. If it is a child of an owner (more than 5%), then the child is an HCE by attribution automatically.

if money is there and the owner/employee demographics are there.

Yep thanks. And Box E on the Form 5500.

Does anyone know where on the 5500 you indicate the plan was retroactively amended?

I think I may have found something: Form 5500 Filing Requirement In August of 2021, the IRS issued an Employee Plan News bulletin that states that retirement plans that are retroactively adopted can skip the first year’s Form 5500 filing. Plans that are retroactively adopted become effective as of the last day of the first plan year, creating a one-day plan year that would normally require a Form 5500 filing. However, the IRS is allowing plan sponsors to file their first Form 5500 for the 2022 plan year, indicating on the filing by checking a box, that the plan was retroactively adopted.

Plan was created in August 2022 with a 1/1/21 effective date so they could do a PS contribution for '21. Was there supposed to be a 5500 filed? If so, how do you go about it? Plan wasn't in existence until August, well after the extensions were due. is there a special 5500 rule for plan that are retroactively adopted?

Sec 1.413 is for union plans, though.

Yeah, I think the OLD rules were that you had to say in 2021 we may do it and in 2022 you had to say yes/no and then say we may do it in 2023... Did PPA change that? Now only a 'yes' notice is needed?

Participant terms with a loan balance. He takes his money, taxes taken and loan offset at the record keeper. A month later he's rehired and wants to start repaying his loan. is that an option? The R/K said they could "convert" a loan using the prior balance (plus any interest, etc) and go from there. But is that w/in the rules? My question is, what if he terms again in 6 months and the loan gets defaulted/offset again? He'll be paying taxes on it again.

I have a plan that is a MEP and the assets are all in one big account at the recordkeeper. From time to time there are forfeitures from participant accounts due to distributions. Those forfs go to the forfeiture account. But it is also just one account for the plan, not broken out by company. How can/must those forfeitures be used? That is, can the forfs from one company be used to cover the contribution or fees of another? From my limited research on the issue, people suggest the forfeitures from each of the companies be used only for the respective entities. However, the regs are silent on the issue. It seems the IRS did not contemplate this situation.

Was there a notice sent last November stating there MIGHT be a 3% SH for 2022? if so, they can certainly opt out by sending a 'nope, not gonna do it" notice.