Lou S.

If you are a "3% yes" in the document, you can't go to "3% maybe" mid-year, you would have to make that change effective the next Plan year.

It sounds like your looking for Pooled Employer Plans introduced by the Secure Act.

Regs were finalized in July of 2018 (I think that's when it was) allowing for that change. The original position always seemed strange to me, the change was a welcome one.

Looks to me like it was corrected by reversing a payroll error that shouldn't have happened.

When was it deposited? Is it a pooled account or individual? If deposited in 2021, why not call the $500 a 2021 contribution? If pooled, don't you have a $500 profit sharing contribution? You say "after taking into account the contribution for employee", why not use that $500 to fund the first $500 of the employer contribution for the employee contributions? And then you have last resort - §415 excess refund.

Retro actively amend to allow in-service withdrawals of profit sharing money at age 35 or more than 5 years of participation? Might open the flood gates if there are other employee accounts to consider.

Are you saying she got the $750 as income and also left the 401(k) contribution in the Plan? If that's the case as I understand it you have theft of $750, an uncorrected 402(g) excess, and an incorrect W-2. If they reversed the $750 contribution out of her account while running a corrected payroll and W-2 due to the unexpected 27th payment, you're probably fine. But it sounds like the former was done and not the later.

I don't see where the recent IRS notice extended that particular deadline and the April 15th date is in the regulations under 402(g).

Deductibility of retirement contributions is tied to the due date of tax returns with extensions. So if the IRS extends a tax filing deadline for an entity, that extends the time to make a deductible contribution.

As long as the Plan's Trust document allows it, sure. It's not prohibited.

Can't say it's something I've seen before.

I doubt there are any pre-approved Cycle 3 documents that specifically reference age 72 since the Secure Act passed long after the submission deadline of the Cycle 3 documents for IRS approval. I can't speak for all pre-approved documents but our Cycle 3 Master Text still references 70 1/2 in a number of places.

I've never tried it but the 2021 Form 1009-R is out so if you have the ability to generate them now, you can certainly send them to participants since that is before January 31, 2022 due date. I'm not sure if the IRS-FIRE system is set up to receive 1099-Rs yet for 2021 so you may have to wait on the electronic filing to the IRS, but mailing the 1099-Rs to pariticpants is limited only by you ability to produce them.

Just a guess, did employees elect a fix dollar amount per pay period? Like $50 per pay period on the election form but some payroll they have no compensation and payroll is saying they "owe" that amount for the payroll they had no compensation? I agree with Bird. If that's their position it's a stupid one. It might make some sense in the case of health care premiums but I can't see where it would make sense for retirement plan contributions.

It seems like a strategy to minimize taxes in retirement. Whether or not it is "good" will depend a lot on your personal situation and goals. But on it's face it sounds like a reasonable plan. Don't forget you will have Social Security benefits that are partially taxable, a portion of which is included in your AGI. Also at age 72 (barring another tax law change) you will have Required Minimum Distributions from your IRA accounts that may be larger than the standard deduction depending on the size of your IRAs.

I agree with what Rather Be Golfing says. But in case it's not clear you have 2 separate limits. For 2021 you have an IRA limit of $6,000 plus $1,000 catch-up if eligible. Your CRD from 2020 can be rolled back to an IRA at any time up until 12/31/2022. There is no ordering rule for how you deposit them to your IRA, you can chose to do one, or the other, or both.

Do the plans file on a cash or accrual basis? Were the post merger deposits contributions for the old plan or new plan?

For small plans (under 100 lives) the DOL has a safe harbor of 7 business days after the pay date. Anything longer than that you are into facts and circumstances to justify why it takes that long.

Each plan that issues a refund for excess deferrals between 1/1/20xx+1 and 4/15/20xx+1 would issue a 1099-R in January of 20xx+2 for year 20xx+1 with code P indicating that the refund was taxable in year 20xx. No correction to the W-2 is required.

What does the Plan Document say?

Leaving out the timing of deposits was it an "Excess Deferral" or an "Excess Annual Addition"? You'll find they have different meanings and 1099-R implications. An excess deferral means you exceed the elective deferral limit under 402(g) limit of $19,000 plus catch-up of $6,000 if applicable for 2019. An excess annual addition means you exceed the 100% of pay limit or the $56,000 415(c) limit catch-up of $6,000 if applicable for 2019. In the former case you would include the excess when you file your 2019 tax return and your 2020, 1099-R should have code P indicating taxable income in 2019. In the later case you are correcting under EPCRS and you would have deducted the contribution in 2019 and then picked it back up as income in 2020 with distribution code 7. Your pension adimin should be able to tell you want happened. If you're doing it on your own, good luck.

https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions This is from the IRS FAQ on rollovers from qualified plans to IRAs. I'm pretty sure a rollover from Plan to IRA counts as rollover #1 (assuming it wasn't direct trustee to trustee) but if you find guidance to the contrary I'm happy to be corrected. Though it does go on to say So your understanding might be correct and I could be off.

If you cross test on a contribution basis it will pass easily with HCE 15%, HCE 25% and NHCE 25%. But as others have said you need a document that allows for varing rates of contribution and you currently don't have one.

If the plan is top heavy and you bring them in, they absolutely need a T-H minimum contribution assuming they are employed on the last day of the plan year in which they become a participant. As for other employer contributions I agree with Zeller, what does the document say and what does the amendment say?

Make sure they are trust to trust transfers so as not to violate the one rollover per year rule. That is it should go directly from Plan A -> IRA -> Plan B without the individual taking a cash distribution then writing a check.