Lou S.

As I understand it you need the same plan year to combo test the DB/DC so unless you are terminating the DC plan the same date as the DB plan I would think think you would want to make the termination December 31 if you want to combo test the DB/DC together. Maybe someone else has a different opinion. And since this sounds like SH 401(k) unless you meet one of the exceptions, operating at economic loss, or qualified business transaction (generally selling the company) you'll lose the safe harbor status for the year of termination if it's not 12 months.

Scenario 1. Taking monthly AB * 12 is typically what we do and then tell them to take the subsequent RMDs in the same month each future year. Scenario 2. I'm not sure I follow your question. He made an election for how he is taking his benefit and that would continue.

As long as you are consistent and do a final true up at year end, I don't see a problem with doing it through out the year other than it could be more complicated and more chance for potential errors.

It's no longer in a qualified retirement plan once the annuity is purchased so employment status will be irrelevant. Contacts will need to comply with 401(a)(9).

I think Bird is right.

I don't think it falls under the clearly approved mid-year SF amendments and you'd be safer making the change 1/1.

There may be some facts and circumstances that would give weight to the argument that the person in question who did not receive compensation for the entire year was still in fact employed and did performer services for the period. I'm not a lawyer and wouldn't want to argue said facts before an IRS auditor if it came to it.

I believe you can roll to an inherited IRA and retain the death benefit exemption from the 10% tax. But if the spouse treats it as his or her own it loses the death benefit status.

3 plans or 3 accounts? It sounds like you were going from pooled to individually directed accounts and changing the Plan sponsor.

Good question. You may want to contact EFAST directly for an answer. One approach might be to file an AMENDED return with the correct EIN in Box 2b, and complete section 4 with the incorrect EIN in 4b of the original filing.

I think they are excluded from the test since from your original post it appears they have "not performed services" even if they are not technically terminated.

You may be right but I think the largest first half of the year market drop since 1932 is bit more than "regular market volatility". That said, I don't see suspension of RMDs on the horizon for 2022 due to revenue concerns brought up earlier but who knows, maybe it gets slipped into Secure 2.0 and passes before the midterms. I just wouldn't be banking on it.

I'm pretty sure this was cited by congress both times they suspended RMDs. Now the 2nd time they did it, the market rebounded and then some in the same year but it was clearly the justification for it in the CARES act.

https://www.irs.gov/instructions/i5330 If you can show "reasonable cause" they may waive some or all the penalties. I don't know how successful reasonable cause letters are in getting the penalties waived.

You can only do one per year. I forget if that's calendar year or 12 month period or you need to satisfy both. I haven't had one in a while, thankfully. But if the Plan allows for rollovers-in I don't see why he can't roll it back into the Plan. You then also have a pretty clear paper trail of the 60 day rule.

Not that I've heard.

Well if 1 is the only problem. You over contributed for one participant for 2020 but deposited in 2021. Shift the $2K excess from 2020 to 2021 and have them file amended tax return for 2020 with lower deduction. If you have an excess for them for 2021 - move it to someone else along with earnings. If owner was supposed to get 5K for 2020 but got $0, shift the 2K to him and make the additional 3K due. You have an excise tax for the 2020 plan year for failure to meet minimum funding by 9/15/2021 and probably need amended 5500 return for 2020 to report the failure to meet minimum funding. If 5330 excise tax is late, pay the penalty (not you but client). You are in the 2 year window so I think this can be self corrected under EPCRS if you meet the rest of the criteria in the rev proc. but double check that this isn't something that requires VCP.

I think you are OK. Doesn't DC TH-min require employment on last day of the year? So you shouldn't have a 411 cutback issue.

I think the plan was probably deferral and match only and there were a number of eligible employees who did not elect to make 401(k) contributions and did not have any balance in the plan. At least that's how I read the OPs post but maybe I'm wrong.

Is it cross tested with everyone in their own rate group? And have a resolution that the allocation is $1,000 for (list folks who got $1,000) and $0 for (list folks who got $0)? And does that pass testing? But yes treating it as an elective deferral might be best and most correct option but that may open a whole payroll can or worms with timing, taxes, reporting and W-2s as well as potential 402(g) issues that are now after 4/15 if this was done in 2021.

Pretty sure conversions were made irrevocable some time ago by law. Forget which law.

Sounds like you found your answer but it is probably addressed in your plan document. Some documents will call for a refund of deferrals so the participant gets the full employer contribution, others will limit the employer allocation to not exceed the 415 limit.

Bird, I think the issue that the on going plan has no problem making installment payments but a terminated plan dissolving the trust isn't sure how it's going to pay out installment payments and may be having trouble finding someone who can.

I think it satisfies the "principal residence" criteria but I am not a lawyer. That said taking a hardship distribution to buy a property in someone else's name seems like the height of financial stupidity on the participant's part but it's not my money.

I thought they were quite common in the small plan market. I'd report 10% of the assets as the bond amount as I'm fairly certain that most of those increase bond protections are capped at the lessor of 10% of assets or $500,000 if you read the fine print.