Lou S.

It should be paid from the Plan to the Participant and reported on a 1099-R. Presumably with Code E indicating an EPCRS correction.

Voluntary AFTER Tax are not deducted. Hence the name after tax. The employee pays tax on them. The employer gets a deduction as they are part of the employee wages. They are not required to be reported on a W-2, but they can be reported in Box 14 for informational purposes.

That sounds like a question that should be referred to the Plan Administrator's or Plan Sponsor's attorney or bankruptcy attorney, if applicable. I'm not a lawyer but if the Plan Sponsor is the Plan Administrator and fails to perform the duties I think the IRS could probably go after the officers or owners of the company, but again I'm not a lawyer and suggest referring that question to qualified legal counsel. And you already know that not filing will trigger a letter from the IRS.

If he was a more than 5% owner at any point during the Plan year he is a key employee. See §416(i)(1)(A)- (i)-(iii).

If they bought the stock they bought the history. HCEs of ABC in 2021 will be HCEs of XYZ after the purchase. 5+% owners of ABC in 2021 will be HCE's of XYZ in 2022. Employees that have compensation over the HCE comp limit (unless not in TGP and that election is made) combined from ABC & XYZ in 2021 will be HCEs in 2022.

Yep brain cramp - 2020 - I'll edit my prior post.

CARES allowed it up to $100,000 but only through 12/31/2020 for Coronavirus Related Withdrawals which could be self certified and only for plans that added the CARES withdrawal provisions. I'm not aware of a general expansion for under age 59.5 other than the hardship exception. If it has been expanded, hopefully someone can point out where.

It sounds to me like a distribution from the plan. From your standpoint I would think the best solution would be for him to file an amended tax return, treat the amount as a distribution from the plan, get spousal consent if applicable. Count the distribution against his 415 limit. Adjust any rollover to the successor plan for 415 limit and increase suspense account accordingly. Allocate the suspense account in QRP over 7 years as originally planned. I mean he probably never should have made the contribution it sounds like but since he did I don't see how you unwind it just because he decided he didn't want to put it it. It doesn't sound like a mistake of fact.

Try the Bipartisan Budget Act of 2018 (Act). It optionally allows but does not require the expansion discussed.

Yes

Looks like you have $185K of income (278 + 34 - 127). I think if you didn't have the S-corp you could treat his loss as $0 for plan purposes but since all 3 are adopting members of the plan and a controlled group I believe you need to aggregate his W-2 wages with his SE loss.

Yep - Relius and got 2 more this morning another EZ and a SF. All 4 are DB plans. 3 of the 4 Plans also filed a DC Plan on the same day and I have not yet received any notification on those Plans. Maybe they got around to checking the SB was signed and attached and someone at EFAST updated something wrong or their system auto generated these? Guess I'll be calling EFAST at some point to see what's going on unless there is a notice that this is a known issue and I can ignore it.

I just received 2 e-mails from EFAST that the filing status of 2 plans were updated as "filing received" but the files were sent in April & June respectively which both had good ACK files and the new e-mail has the same ACK file as the old. I did not re-file either plan myself. There were 2 warnings - one is basically "filed after due date with no cause or amendment" and the other is "matches another filing in database" I'm trying to figure out if it's a general problem with the new electronic filing system for EZ plans or specific to 2 of my plans. Anyone else get one of these?

From the fact sheet https://www.cdc.gov/mmwr/volumes/70/wr/mm7034e5.htm Assumed commencement date: On what date will the annuity payments begin? Plan administrators must calculate monthly payment illustrations as if the payments begin on the last day of the benefit statement period. Assumed age: How old is the participant on the annuity start date? Plan administrators must assume that a participant is age 67 on the assumed commencement, which is the Social Security full retirement age for most workers, or the participant’s actual age, if older than 67. Assumed Spousal and Survivor Benefits: What is the SLA benefit? Plan administrators must illustrate a Single Life Annuity, which will pay a fixed monthly amount for the life of the participant, with no survivor benefit after the participant’s death. What are the QJSA spousal assumptions? Plan administrators must assume that all participants have a spouse of equal age, regardless of a participant’s actual marital status or the actual age of any spouse. What is the QJSA survivor benefit? Plan administrators must use a Qualified Joint and 100% Survivor Annuity, which will pay a fixed monthly amount for the life of the participant, and the same fixed monthly amount to the surviving spouse after the participant’s death. Assumed interest rate: Plan administrators must use the 10-year constant maturity Treasury rate (10-year CMT) as of the first business day of the last month of the statement period to calculate the monthly payments. The 10-year CMT approximates the rate used by the insurance industry to price immediate annuities. Assumed mortality: How should life expectancy be determined? Plan administrators must use the gender neutral mortality table in section 417(e)(3)(B) of the Internal Revenue Code – the mortality table generally used to determine lump sum cash-outs from defined benefit plans. The use of gender neutral mortality tables is consistent with Arizona Governing Comm. for Tax Deferred Annuity and Deferred Compensation Plans v. Norris, 463 U.S. 1073 (1983).

Did they sign the document? If so the IRS thinks they have a plan.

I have not come across that question but it looks like the answer is yes, you can use the number issued from the W7. https://www.irs.gov/forms-pubs/about-form-w-7

I'm not sure I follow your question. If the NHCE ACP is 6% the HCE ACP could be 8%. And the HCE is probably also getting the match in addition to any VAT.

In 2020 it was line 5500-EZ - 7B 5500-SF - 8a(2) 5500 - Sch I - 2a(2)

Then assume he accrues a benefit.

What are the conditions for accrual in the document and does the participant meet those?

If he's an employee of the PC he should receive a W-2 and the PC could adopt a Plan. If he's an independent contractor he would file a schedule C for earned income and could adopt a plan for the that. There are a number of adjustments to his Schedule C Net income to determine his pensionable income such as reducing it for 1/2 his SE tax as well as any employer contribution he makes for himself. And as Bill mentions, both entities may have to adopt the plan. You might want to have a talk with his accountant to see what he is doing.

Nothing needs to be prorated for this individual. If that is $350K salary in 4 months he will hit the 401(a)(17) limit of $290K. If his salary is $350K annually and he's being paid 4 months he'll be under the comp limit and HCE limit in 2021 and not an HCE for 2022. If $350k w-2 salary, unless they are an owner, they will be a NHCE for 2021 and HCE for 2022 which could have implications for your 2022 test if you test statutory exclusions separate. I suppose it's possible he's not an HCE because he's not in the TPG and the plan applies that election though it would be unusual.

Forfeitures should be disposed of annually. I'd be shocked if the plan doesn't have some direct or indirect mechinism to allocate to participants as a profit sharing allocation. Like simply have the company declare a profit sharing contribution equal to the forfeiture balance and then reduce employer contributions by the forfeitures.

Always a good sign...

Is this a PBGC Plan? If not don't you have combined DB/DC deduction issues? Are the husband and wife the only 2 participants? Is the wife's W-2 compensation $80K and husband Earned Income compensation $0? Would an additional DC contribution drive his earned income below $0? And if so wouldn't that just shift more of the $225,000 DB contribution from 2020 to 2021?