Lou S.

It's more likely she's trying to exclude 20% of her income from taxes on the qualified business deduction but I Larry said it better than I, she sure sounds like an employee no matter what she wants to be called.

As JAA says if testing passes, noting to correct. If testing fails VCP is likely only option.

Since same sex marriage is now legal, is this an outdated requirement from the the City of San Francisco? I'm not sure how under Federal Law and ERISA you would have a domestic partner considered a spouse with the same rigts, but I am not a lawyer so I could be missing something obvious. Like you point out I doubt there any ability for a domestic partner to roll to an IRA they treat as their own as a spouse could, you would need to roll to an inherited IRA like any other non-spousal beneficiary.

Refer her to the company's employment attorney.

The Plan should be amended to have XYZ, Inc. be the plan sponsor.

And don't forget this will not be a "qualified plan asset" you won't be able to file Form 5500-SF and you have additional requirements to avoid the small plan audit requirements is that's a concern.

If they terminated and are not employed on the last day of the plan year they do not have to receive the TH-minimum, assuming you are passing 410(b). If they are not receiving the allocation because they failed to work 1000 hours but are employed on the the last day of they plan year they need to receive the TH-minimum. The TH-minimum can be off set on a dollar for dollar basis by any matching contributions they received, if the Plan document allows.

You have to follow the terms of the plan. If they were eligible for the SHNE they need to receive it. If this creates a 415 problem, you need to correct.

What does the Plan Document say?

The short answer is yes they can. Loans are not a protected benefit and can be eliminated or restricted at any time. Whether or not they did do that is a separate question you would have to ask your plan administrator as your last documentation seems to contradict what your 401(k) company is saying.

I would start by requesting a copy of the 2019 Safe Harbor notice that you should have received sometime in October or November last year.

I meant last year in the 30-90 day window what notice was given about the current year safe harbor.

Did they give a "maybe" notice for this year? Are they going out of business or faced with a heavy financial loss?

The 401(k) Plan must independently satisfy the the 401(a)(9) minimum distribution rules for 2019. So yes I agree with the accountant.

If it was 2018 - then I don't think there is any thing to correct. If it is 2019 - then the plan should send him the additional $2000 and recover the $2000 withholding from the feds. That may or may not be practical or easy.

You withheld too much, simply report what you withheld and move on. As ESOP guy says it all came out in the wash when they did their taxes. Unless you are recoveing the the extra $2000 in taxes that was sent to to the IRS and sending it to the participant.

There are a number of acceptable ways to do it but it should be coordinated in both documents as to where and how the top-heavy minimum is satisfied. You may find that switching from a SH match to a SH non-elective may be the way to go. Largely due to losing the get out of TH free card and fact that you may need to satisfy the gateway requirements that often (but not always) in small plans works out to a 7.5% of pay contribution to NHCEs in the DC plan. You'll also often find the TH minimum in combo plans is given in the DC plan. If a non-key employee is covered by both plans you typically have the following options 1 - Give TH minimum in both plans 2 - Give 5% minimum in DC plan 3 - Give the 2% minimum accrual in the DB plan 4 - Another method acceptable under the code. If a non-key employee is covered by only one plan, they receive the TH minimum in the plan they are included in.

We send ours in one FEDEX batch and retain the FEDEX proof of delivery.

Luke this is the closest I could find to "official IRS guidance" https://www.irs.gov/pub/irs-pdf/p4278.pdf

Isn't the Uniform Life Table simply a subset of Table II where the beneficiary is assumed to be 10 years younger than the IRA owner?

So you would have no salary while a participant. That's problematic.

If you do not intend to take any salary, how will you establish a 3 year high salary while a participant for 415(b) purposes? I'm assuming this a new plan and not an amendment of an existing plan. We don't typically see such a large range on 1st year either due to various IRS limits. You might want to ask Firm 1 how they are generating such a large range. As for flexibility understand that DB Plans have required contributions, sometimes whether you want them or not.

Short of reviewing the 2018 valuation to see if the required minimum contribution is correct? You are too late for a funding waiver which probably would have been cost prohibitive anyway. Is borrowing funds to make the contribution for 2018 an option?

The loan has about 2.5 years left on it. It's a small plan and the participant is the wife of one of the owners who also process the company deposits. All Participants have maxed out their 402(g) limit for 2019 so to avoid the administrative hassle of logging on every 2 weeks for the rest of the year to simply make her loan payment she wants to make one payment covering all the remaining semi-monthly pay periods in 2019 so it is one less thing she needs to worry about. I personally don't think it should be a problem or complicated but IRS rules on 72(p) and the custodian seem to be giving us blow back and want to treat it as an additional principal payment that doesn't effect any other remaining payments.

You have to give them an option and 402(f) notice at least 30 and no more than 90 days before forcing a distribution is my understanding.