BG5150

I am certainly no ADP/ACP testing expert, but to shift matching contributions to the ADP test, doesn't the match have to meet the QMAC requirements? I don't see anything in the OP that would indicate they do. rcline was talking about going from ADP to ACP, not the other way.

There's nothing out there that says deferrals must be made from the FIRST $245,000 earned.

For ADP testing, I believe, you can use any definition that satisfies 414(s).

In my final 401(k) amendment, it referecnes section 1.401(k)-1(d)(2)(iv)(A). However, I cannot find that section. I found 1.401(k)-1(d)(2), but I do not see any subsections. Can anyone point me to this reg? This is where I was looking: http://edocket.access.gpo.gov/cfr_2005/apr...01%28k%29-1.pdf (it is on p. 303, or p. 10 of the pdf)

We always give it to them when they get the 1000 hrs.

I would think your plan document would have the remedy.

And to answer a previoulsy asked question: the excise tax applies to the gross amount; the earnings are not included. Form 550 mentions only the excess and excess aggregate contribution, nothing about the distributions.

I wouldn't consider the document for which you are requesting a determination letter and amendment for that pupose.

Are you considering salary deferrals as "employee" money? I always considered after-tax and rollover as the only "employee" money, and all other types of contributions as "employer" contributions.

My document says I can do a targeted QNEC, wherein I can do a QNEC the greater of 5% or twice the "representative contribution rate." That rate is defined as the lowest rate of the group that consists of half the NHCE's still employed at the end of the year. I have 21 of those NHCE's. When I rank them by ADR, my 10th participant has 2.60, and the eleventh has 2.30. So, is half my population 10 or 11 participants? If its the former, I can get a QNEC of up to 5.2% to select participants; if the latter I can use 5%. Your thoughts are appreciated.

Does the plan allow an irrevocable election to not participate? Use that. (However, I thought that it would have to be signed prior to becoming eligible.) You could give him a unique job classification and exclude that classification from the plan as long as you pass coverage, I think.

I wonder if sending the withholding to the Department of Transportation (?) is the correct procedure. That's where the money comes from to fix our roads...

And if the person is requesting a distribution, why have it paid back and then sent right back out again? Wasn't a 1099 done for the original, though incorrect, distribution? If so, you'd have a double taxation issue, I'd think, if it was paid back and then re-distributed.

Well, if this is a calendar year plan, you have until March 15 to get the refund out. Will enough of the loan be repaid by then to be able to make the payout?

But, I would think the notice that goes tot he participants before the plan year starts would say the exact percentage to be given. Even if the document states "at least 3%," the notice would have to say "3%" or "4%" or whatever the ER determined would be the SH for that year. Or, can the notice be ambiguous in that regard? And I didn't understand this: (emphasis mine)

Yes.

Where do you get $383,200? Read the plan document for the allocation method for the profit sharing allocation. The Top Heavy contribution seems to be satisfied already, so you would be just allocating a regular 'ol profit sharing.

Is the Safe Harbor for first-year participants based on full-year compensation? And were any forms of compensation excluded from the TH determination? I believe the Top Heavy contribution is based on full-year, 415 compensation, which cannot exclude OT, bonus, commissions, etc.

I have a participant who took out a loan in 2003. No payments were ever made for whatever reason. So far, not tax forms were issued for it. So I am going to have one issued. What code does it get? P for 2004 (the loan defaulted Jan 1, 2004)? Or is it a 2010 form? Also, because the person is still employed, the loan is still considered outstanding, correct? And if he decides to pay it back (a big if), would those payments come in as after-tax payments, creating a basis, since he'll already have the tax burden of the money?

Has anyone ever had a problem with a loan that went a week or two over because of the first payment date stretching out a little too far?

As long as the set-up time is no longer than 1 payment period you are okay. Eg. if you set up a loan on Jan 5 on a semi-monthly payment, and the first payment is due Jan 15, the last payment will be either Dec 31, 2014 or Jan 1, 2015, depending on if it 1st-15th or 15th-31st. Same situation, but quarterly payments. Loan date Jan 5, first payment April 1. 20 payments will be done on Jan 1, 2015.

I thought the excesses are taxable in the year of distribution now, regardless of when they are taken.

I think I knew what you meant, but I'm just being persnickety today.

'Net value' includes the gain/loss; no need to add it in twice.

Was the 5500 done on a cash basis or accrual basis? And I thought that the electronic filing was for plan years beginning after 12/31/08, not the return's date.