BG5150

I think we have to look at: what does his (revised?) 2018 W2 say? If it is zero, and code 12D is zero then maybe it is indeed a mistake of fact. (?)

No. But is should get done as soon as is feasible. Excess plus any gains get removed and placed into a suspense account. Those funds must be used to offset future SH Match until the account is exhausted. Check out EPCRS section on excess amounts.

I this case, there WAS a business deal between A & B--A bought B in my example. I'll Look at that EOB section , though. Thanks.

Participant took a hardship in 2018, but the ER did not suspend the deferrals. What do we do now? I think we just suspend the deferrals for 6 months going forward? What about the "no more suspension" rules for hardships?

Company A, who has a 401(k) plan, buys Company B (with no plan) today, and they grant all service with Company B. The plan has the standard 21/1/semi-annual entry. When do the new EEs enter the plan, assuming they all satisfied the 21/1 requirements? Can they be held out until 7/1, or do they have to be immediately be eligible since they have their 1 yr of service and already have passed an entry date, similar to a rehired EE.

Keep in mind, you cannot have over $50,000 at one time in 12 months. So, you can't allow for two loans at a time and let someone take two $40,000 loans right away.

So I'm guessing they should be counted in both tests.

I do not see anything in my doc about when there are multiple failures, or any sort of order. It says 415 excesses are corrected under EPCRS and, later, excess deferrals have to be out by 4/15.

Can someone be covered under a union 410(k) and an ER-sponsored 401(k) plan at the same time?

Don't confuse "when a match is contributed" with "when a match is calculated." You can have a match that is calculated on a payroll basis, but they are deposited after year end. It doesn't happen often, but I have seen it. (Likewise, I seen annual matches deposited each week with the deferrals.) The only match that must be deposited during the plan year is when you have a Safe Harbor Match that is calculated on a payroll basis. Then, the match must be put into the no later than the end of the quarter following the deferrals. Having a true-up on a match that is calculated on a payroll basis is silly.

For one, the taxation. Usually, if refunded before April 15, the base excess is taxed in the previous year and the earnings are taxed currently. For 415, the entire amount is taxable in the year its distributed.

Why is that, Mike? I would lean to 415 b/c everything is taxable in '19.

From the 1.401(k)-1 regs: source: https://www.law.cornell.edu/cfr/text/26/1.401(k)-1 underline emphasis mine

If the participant has access to other funds under the F&C program, then I think the hardship should be denied.

Participant only received severance on his 2018 W2. He deferred $24,500 from it. So, the money has to be refunded. What excess is it? 402(g) or 415?

Most of the rk's we deal with just have the withholding elections right on the form.

The $1,750 (plus any gains/losses) should be removed from the account and moved to a suspense account per the EPCRS correction on excess allocations. It is not tested in ACP.

It's $45/hr...

If it's calculated on a payroll basis, there is no true-up.

Does he want to defer? You can exclude his job title from the plan altogether.

I think if you are using the 5% gateway, then you have to use 415 for the gateway test.

Can someone give me a link to where I can see the IRS service spanning rules? TIA

Not yet.

I'll cash out, buy bitcoin and deal in SSNs and passwords on the darknet.

Ask him why he is doing it that way, and why he would think that's acceptable. How could an eligible participant who's never had a contribution (deferral or PS or whatever) all of a sudden now have an account b/c the trust had a gain? Are you sure he's not trying to allocate a Profit Sharing? And, tip of the iceberg, indeed. If this is how he allocates earnings, I don't wanna know how the rest of the plan is being run...