Bill Presson

I think it matters depending on whether they are intended to be in the plan for the whole or part year. We typically include the "entry" date since that will correspond to when the employer allowed them to defer (for example) and we want that part to be clear.

Agreed. Same.

Agreed. Just tell him to make sure the entities overlap in existance.

Agreed

HCE determination (and lots of other things) is made under section 318 and is different than attribution for controlled groups (section 1563). Under 318, a parent is deemed to own a child's stock no matter the age of the child or the percentage ownership in the business. I love this summary from Lincoln. https://www.lfg.com/wcs-static/pdf/Attribution of Ownership in Retirement Plans - PDF.pdf

You're going to have to clarify all your comments. I can't tell what is happening, especially with this bold part.

On the "no participation" make sure they aren't named as officers in the other company and don't have any signature authority.

1. Do they have a minor child? 2. Is it a community property state? 3. The spousal attribution exception from the IRS: EXCEPTION: No attribution between spouses if there is no: • direct ownership, • participation in company, and • no more than 50% of business gross income is passive investments. See 1.414(c)-4(b)(5)(ii).

Having completed deferral paperwork is ideal. But it's really not required. The daughters likely said, "mummy/daddy, please don't take more money out of my pay!" and that's the end of it. Are they going to testify otherwise?

We can't set up all the new plans, so we're grateful for the silly people that screw things up and enable us to grow via takeovers.

Generally speaking, we're interested and willing to work with most advisors. We want them to be open and honest about their capabilities and work with us in serving the client and not just as a gatekeeper. With that said, the vast majority of our business comes through the advisor to us. It is an incredibly rare situation for us to have a client come to us without an advisor already in the mix.

I would be interested in a way of doing a retroactive merger. I'm not aware that can work.

Can't do it. Create a new plan and merge them. Should have allowed PS in the 401(k) from the beginning.

Agreed. And document everything.

Agree with Belgarath. The 1099 is issued based on what transaction took place from the plan. What happens after that is irrelevant to the plan.

I just don't understand why people intentionally create hardships for themselves and others.

The 50% of the balance amount for a loan is only relevant when the loan is issued. After that, the participant still has access to all the rights in the plan.

Pretty sure the OP is referring to distribution paperwork in this case and that's our experience with Nationwide. They require wet signatures and won't do any distribution steps online.

EE is 100% vested.

Also (let me just mention because I didn't realize for a long time) the matching contribution is not based on any compensation limit. So if someone makes $500,000 per year and defers $14,000, the match is also $14,000.

The participants have the right if it's in the document. The document either needs to be amended to remove the option or the employer needs to find new service providers.

Ms Rita, The QNEC is an employer contribution and doesn't count against your $20,500 limit. You're eligible to defer the additional catch up amount in 2022 as long as you turn 50 anytime during 2022. So, if you want to do the additional deduction, contact HR/payroll. There are no IRS forms that you need to complete related to the QNEC. FWIW, QNEC stands for Qualified NonElective Contribution. It's an employer contribution typically made to allow the plan to pass a discrimination test rather than give refunds back to people. Since it's an employer contribution, it won't show up on your w-2 at all.

Termination date isn't when the plan evaporates. It just means no more contributions for compensation earned after that date. So just do all the stuff you would normally for a 2022 calendar year plan. Then do the distributions and file the final return for the 2023 (short) year.

Likely SOL means something different for the client in this scenario.

Agree with EBEC on the issues of different tax years. I think that's important if relevant here. Also, how is the money going to be "paid back" and in what amount? Reduced final check? Actually writing a check back? and is that amount the gross amount of the bonus or the after tax amount?