thepensionmaven

More facts: Plan established in 2012 as SHNE. For 2015, employees given SHNotice and plan amended as of 1/1/15 for SHM. Client was told the basic safe harbor match as defined, 100% up to 3% and 50% of the next 2%. Of course, client forgot about the 50% and only contributed 100% of the employee deferral up to 3% of W-2. Wouldn't this take the plan out of SH status and subject the plan to ADP testing? But, then again, there would be no testing as there are no HCEs. I assume all who met the age/service would need to get the TH contribution, if applicable.

Three dentists share office space as well as a few employees. Clearly this is a controlled group. One of the dentists split - moved his practice to another location and is now totally unrelated to the others One or two of the employees now work for this dentist part-time as well for two of the three remaining tests part-time as well. Since this is not a controlled group situation - common control is 33.33% - must the part-time employee still be counted and receive a contribution from either plan?

Plan effective January 1, 2016, employee in question "terminated at least 5 years ago" per the client. He was rehired November 6, 2016. No mention of prior service. If the employee were already a participant, I could see the application of the break-in-service rules, and he would re-enter the plan upon rehire; but he was not a participant at that time. I believe he would have to meet the 12 months in order to be eligible for participation?

Client received IRS Notice CP-403, no 5500s were filed for 2015-2016 . We had been after the client to send the information. Now that the client receives an IRS Notice, he finally sends a spreadsheet with the employee and employer contributions for each year. Upon review, we determined the safe harbor match was calculated incorrectly for 2015-2016-2017. I know there is a 12 month period after the end of the plan year to make the safe harbor contribution, but what are the ramifications if the corrected contributions are made after the 12 month period?

Client initiate new 401(k)/PS plan effective 1/1/18.Plan consists of three participants, father and 2 sons, no common law employees. The makeup of the company is such that they do not have steady income, but rather receive in huge chunks during the year. Can they make their deferrals in one shot during the year? I remember somewhere that as long as the income for the month is at least the max deferral, this would be kosher, but never ran into this situation before.

While reviewing W-2s for 2017, client informs me one of the employees was employed prior to the effective date of the plan (1/1/16) and was rehired 11/5/16. Since there was no plan prior to his leaving the company, isn't he treated as a new employee and thus, the waiting period would apply??

We administer a safe harbor 401K with Roth only deferrals. W-2, boxes 1 & 5 are the same dollar amount, employee deferred $5,000. Wouldn't the deferral (whether Roth or not) be added to box 5 for the calculation of the safe harbor match??

If a terminated participant who has not been paid out, is rehired part-time, wouldn't they have to get the 3% non-elective contribution, as there is no hours requirement for the SHNE? I would think so, accountant says no.

We currently administer a profit sharing plan, the employer may possibly be selling the business. The purchaser will be buying the assets of the company and changing the name of the company, as well. I know you can't have a plan w/o a sponsor, but is there a specific time limit (excluding the IRS12 month rule) within which to distribute, rollover, etc. after the company is no longer in business.

Valid rollover meaning back into the plan? The participant says she needs $50K to pay for some expenses, can not take another plan loan for 12 months from October 2017, says she will repay within 60 days into an IRA. This does not make any sense to me, anyway. Plan allows for rollovers, why not just repay to the plan? Why not put the money back into the plan within the 60 days? 10% would still apply as the participant is under 59 ½, but she must return the money to the plan within the 60 days for the distribution to not be taxable?

Agree with NJ Mike.

We have a client that needs to take an in-service distribution from his profit sharing plan, which does allow for in-service distributions. Since the client is under 59 ½, obviously the pre-mature distriibtion 10% applies; as well the 20% withholding? The client was told by her accountant that as long as the funds were repaid within 60 days, this would not be a taxable event. I do not think he is correct.

Basic question, which category of employees are in Group A vs Group B. If one of the groups is HCEs, I don't believe you would have a problem.

Form 5500-EZ is due for the year in which there are $0 in the plan and marked as a "final return."

A 401K, plan terminating in 2017, last day of plan year 2017 would be the dat all assets distributed, which I do not know yet, but obviously would be the month all assets out of the plan. Accountant questioning RMD for 2018, on the basis that the valuation date for 2018 is the last day of the plan year. IRAs are easy, the last day of the calendar year prior. Qualified plans and 403(b)s, the last valuation date in the calendar year immediately preceding the distribution year? Does this mean we’d have to use the last day of the short plan year within the preceding plan year or the last day of the calendar year preceding the distribution calendar year?

Three dentists share office space and some of the employees. Each sponsor a retirement plan, all of the same type, which were established about 10 years ago. At that time we were advised by a retirement plan consulting firm that these are “shared employees” that would have to be included in the plan of the particular employer if they worked an aggregate of 1000 hours between the different employers; and would have to receive contribution from each plan based on W-2 received from each of different employers.They quoted an old RevRule from 1973 as the only guidance IRS has issued on the subject of “shared employees.” About a year ago, one of the dentists left the group, moved his office to another location but within the same city. He continues to employee maybe 1-2 employes of the original group, but only for 1-2 days per week, which is really irrelevant at this point. Even if one employee is no longer a “shared employee” for the original group who share the office space as well as the employees, we believe that since one of the employees is a participant in this one dentist’s plan and regardless of the number of hours she works for this one particular dentist of whom I am speaking, she must continue as participant in this plan and can not be excluded if she works less than 1,000 hours or employed on the last day any plan year as the plan is definitely TH. Any employee this dentist hires that works solely for him, there is no doubt, this employee is subject only to this one dentist’s plan eligibilty. Concurrance? provisions,etc.

We filed 2015 as initial plan year, there were over 100 participants as of 1/1/15, although due to the initial set-up of the plan with the investment carrier, enrollments were after 1/1/15. Form 5500 was filed for the initial plan year as there were over 100 participants during the year. No IAR for 2015, to follow with 2016. We have had at least had a dozen or so inquiries from IRS concerning other plans' initial plan year returns showing other than "0" at the beginning of year and there have always been problems. In fact, software creates an edit check error if a number is entered on an initial return. I spoke with a person at IRS who told me an initial return should have "0" at the beginning of year. But we know we can't rely on their answers. I infer that you are saying 2015 as the initial return should have greater than "0" as the beginning of year, and amended the return, include an IAR as the plan year was >7 months?

I filed 5500-SF a few years ago, plan was effective 1/1/14, showed number of participants as of 1/1/14 as 5, which is the number of participants. IRS asked for the prior year 5500-SF as we showed a number other than "0" as the number of participants at the beginning of the year. This took 3 months correspondence to straighten out with IRS.

We have a client that has purchased the assets of another company with a chain of retail stores. The purchasee maintained a 401k. The new owner established a new 401k as sponsor, with eligibility waived as of the effective date for those hired prior to effective date of new plan. Technically, there are over 100 participants as of the first day of the initial plan year. An IAR would follow in year#2 as per question on Form 5500. According to instructions form 5500, the initial plan year would show 0 participants at beginning of the initial year and, of course, initial year would be marked. CPA seems to think show actual # participants who would be eligible to enter plan 1/1. Would’t this create a warning with EFTPS and a letter or notice be generated from IRS? Suggestions?

Is there a threshold for not going through EFTPS and instead mailing withheld amount to IRS with 945-V. Form 945 under $2500 does not require dates of payment.

I believe I know the answer to this, but not sure. Client maintains a PSP, needs money for mortgage, wife's PSP balance around $50K. Plan allows for rollovers from IRAs. Can she rollover to the PSP and then take a loan on 50% of the total account, including the IRA rollover. I do not believe so - doesn't the IRA still remain an IRA as far as IRA restrictions, ie there is no borrowing? Not sure.

We have a partnership profit sharing plan effective 2013. Using trade date, less than $250K in plan as of 1/1/2014, using payroll date, $260K in plan with only 2013 contributions. Trade date was basis for 2015 5500s as the first return filed. For 2015, both partners contributed $53K each, but for 2016, only one partner contributed. To be consistent, if we used payroll date for the 2016 5500s, the trust report shows $159K in contributions.made during 2016. Won't the fact that there are two participants in the plan and the contribution made during the year, cause a red flag to either or both DOL and IRS???

Yes.

I found this cite from a few years ago. Thanks .https://benefitslink.com/boards/index.php?/topic/23467-qnec-profit-sharing-contributions/

Client has 401k/ profit sharing plan, non safe harbor. ADP test failed for 2016. Can profit sharing contribution, as long as 100% vested, be used to satisfy ADP? And the balance of any profit sharing contribution be allocated as a profit sharing contribution for the year