BG5150

I thought 415 corrections were under EPCRS, not the plan doc.

Thanks, Bill. I came to that conclusion after I posted this. I just may credit the regular employee with the $500 so the deduction is intact.

Have a client with a pooled 401k/PS plan. One owner had same earned income for 2018 and 2019. In 2018, they deposited the 415 max, let's say, $27,000 plus the full catch-up. In 2019, because the K! was identical, they deposited the max 401k and same PS as 2018 amount in August 2020. So, because the 401(k) limit went up $500 and with the same comp, she is over the 415 limit by $500. How does the 415 refund work when it's all deposited tot he trust after EOY? Do I just pull only the $500? I'm not gonna do a mid-term valuation for a $500 refund. I don't think I can just forfeit $500 of PS since 401k is the first 415 correction.

Are hours prorated, too, for contribution purposes? For example a 1,000 hour req'ment for PS?

If you have two plans and combined they are Top Heavy, make sure that the plan documents agree as to which plan gets the TH contribution.

It could work, but they don't need two plans. Just add 401(k) to the PSP. Structure it so that the participation have investment direction over deferrals and the ER had direction over ER funds.

Plan used to be hubby & wife pooled account. Then daughter joined the company in 2016. Plan was amended to participant-directed effective 1/1/16. Daughter opened her own account. However, the husband and wife contributed to utilize the pooled accounts (there were two, now there's three!). What kind of problems am I looking at with the pooled account for the parents, but an individual account for the daughter? (No other employees)

It's pretty much up to the participant which plan they take the refund from, no? Neither plan had any excess in and of itself.

Auditor is booking the ADP refund on the 2019 return and listing it as payable. So we will just offset 2020's distrib by that amount, I guess. Like I said in the other thread, I just do what they tell me to do, put the note int he file and move on to next year. Just was curious what others were thinking about it.

That was 5 years ago. I don't remember what I was doing 5 hours ago.

I'll take a look

This is from the Datair Plan Term Package participant notice:

Participant left employment July 2019 and is/was 60% vested. Employer terminating the plan on November 1, 2020. If this person takes a distribution next week, will they have to be 100% vested? From the IRS website: All affected participants become fully vested in their account balances on the date of the full or partial plan termination, regardless of the plan’s vesting schedule. (emphasis added) So, the date of the Plan Termination is after the date he is taking the distribution.

Do you book ADP refunds as a liability on the 5500? I have an auditor who insists on having the ADP refunds for 2019 booked as a payable on the 5500. I've never done this. What do you guys do?

Do you have a link to it?

What do you do when the owner refuses to allocate a SH contribution on her own behalf?

I wouldn't put it on 2019 if it was corrected in 2018. I think you are reading too much into it. Think of it this way: "People are not allowed to purchase alcoholic beverages until they are age 21." "Late contributions must be reported until the year after they've be corrected." Using your line of thought, I will be able to buy an alcoholic beverage only when I turn 22.

From the slide: Matching contributions may be included in the ADP test to the extent they are: –100 percent vested –Subject to the same distribution restrictions as 401(k) deferrals –Designated as QMAC –Not tested in the ACP test –Not disproportionate (over five percent or two times rep rate)

That's what I have you guys for! ?

Did you run a hypothetical ACP test with the re-characterized amounts yet? It'll be very embarrassing telling the owner he doesn't have to take an ADP refund, but after all is said an done, an ACP refund is needed.

Are they over 59.5? Then can add an in-service w/d provision.

Well, the plan would have to allow after tax contributions to everyone. (Though, any NHCE using that feature would only be a benefit). Does the plan also allow for Roth? If so, that could get very confusing. Payroll could be a nightmare if anyone wanted to do, say half pre-tax, half Roth and an additional $150 after tax per paycheck. Did you actually do a projected ACP test to make sure it would be ok? (The after-tax gets tested with the match in the ACP test). Besides, the money will still be taxable to the HCE if that's what they are trying to avoid. Plus any earnings on it when they take it out will be taxable (unlike the Roth). Does the Edward Jones guy really know about the after tax thing? Most plans I've seen replaced voluntary after-tax with Roth a while ago. Maybe the EJ plan has it so people can go over the 402(g) limit?

So how do you show it when it goes back out? Negative 'Other Income'? It can't be a distribution. It's already been claimed as much.

Liabilities? It's money that's promised to be paid out.

I can confirm Lois's link works