TPApril

For clarification regarding issuing 1099-R for excess deferrals - is this correct for an excess deferral that is paid by 4-15: There is only one 1099-R issued for the actual excess deferral amount - it is for the year of payment, and code P indicates it is taxable for the prior year. So at the time of preparing that prior year's taxes, there is no 1099-R yet. (note this post does not inquire about related earnings and its own 1099-R). One more question - in this instance is the W-2 corrected?

So the participant does not actually receive a 1099-R until long after taxes have been filed. They just provide the information to the tax preparer? Does the IRS ever end up flagging such tax returns because the taxable amounts don't match what has been provided?

Excess deferrals due to 402(g) limit are paid out by 4/15. Question is the 1099-R with Code P generated for the prior year in which it is taxable, or for the current year it is distributed, even though it is taxable in prior year?

For clarification on excess deferral distributions prior to 4/15 - the 1099-R is issued for the year the excess deferral is distributed, or the prior year when it is taxed? if it is issued for the year of distribution, then what documentation do they bring the tax preparer for the prior year when it is taxed if they have no formal document?

This post is exclusive of anything related to CARES Act. I feel like I saw some headlines going back to 2019 indicating that loan payment rules were being relaxed, such as longer periods to either pay back to the plan or roll the amount into an IRA, or pay by check once terminated into the plan, but perhaps I dreamed it? Just curious, has anything to that effect been enacted?

Figured this out. I know they why, just not the reason. For plan years filed 2018 or earlier, they are using current plan year form (2020) but for whatever reason, because of this they simply won't show up on efast2. Yes there is an ACKID.

To respond to the helpful postings above: Plan Sponsor filed electronically himself using one of the 5500 vendors (not efast2) Plan is a fully insured welfare benefit plan so there is definitely no confidential information, there is no attachment, and no audit. Efast2 usually reflects filings immediately as I'm quick to check I've seen multiple of the situations listed in the past, original and amended are shown or just the amended shown, but I've never seen neither one shown, which is why I posted this inquiry

Plan Sponsor just amended a prior year 5500. The efast2 search now does not show any 5500 for that year - original or amended. Just curious if this is standard, or if something might have gone wrong with filing?

cross-tested plan with individual rate groups requires 1000 hours and last day for contribution. With the individual rate group classification, is it fine to allocate employer contribution (above and beyond top heavy and gateway minimums) to someone who did not make 1000 hrs but still employed on last day? This is a situation of a generous business owner who does not want to leave a part-timer out of the PS contribution.

Can parking costs be deduced from payroll on a pre-tax basis? Is there a limit? If so, is it required to be part of a FSA?

LLC has owner and one employee What with the pandemic, owner ended up taking zero in W-2 pay in 2020 while supporting the employee. Owner took draws though as I'm informed. Plan doc defines comp as W-2. Owner files main taxes as S-Corp. Owner now wants to make a profit sharing contribution to both her and employee and wants to know if there is another way to calculate it for herself. I said no but she asked me to try to research it.

I've been asked if a 2020 year end profit sharing contribution deposited in 2021 can be included in the PPP Second draw application for calculating the loan amount, not for how to use the funds. I really don't know, although I feel like it's more of a cash basis situation.

In my original question, I should have typed 'effective date', not 'backdate'. Anyway, related to this plan that has 2 Individual Trustees named in the Plan: All 10 firm partners will be signing the Change in Trustee amendment (except for now terminated prior individual trustee) Some insist they cannot be bothered over holiday season and will not sign until after new years There is another amendment to be signed by 12/31, but only by named trustees Pondering whether the new trustee can sign the current plan year amendment prior to adoption date of him formally being named trustee of the plan, or if just the one outstanding trustee can sign.

11/1 - One of two named trustees terminates employment with Plan Sponsor 12/1 - Company informs us they have changed trustees Questions: Can change in trustee amendment be backdated to 11/1? Does outgoing trustee who is no longer employed have to sign the change in trustee amendment? (last time this was done ten years ago the outgoing trustee signed).

RBG - That's what I believe. The inquiry here though is not about plan coverage, but about litigation and bankruptcy exposure to wife's business.

Not my best topic, I may have my terms wrong. Husband and wife each own their own separate companies. Wife provides accounting services for husband's business, but does not take a paycheck. Here business is not accounting, it's just that she's the one who's good at numbers. She signs off on documents. Does this make these two companies one control group, or attribute some kind of joint ownership?

I believe the answer to this situation is no, but thought I'd run this question on here: Background: Medical Group, each doctor has own plan. Staff is in a PEO Plan. All provisions and investment options are similar to this longstanding setup that the doctors prefer, and cross testing is run including all of the above. One individual doctor is asking if she can have a Cash Balance Plan.

I could be totally off on this, but... As related to the SECURE Act for >70.5 in 2020: EE terminates in 2020, actuarial adjustment is from 70.5 to current age (75) EE terminates in 2021, actuarial adjustment is from 72 to current age, and therefore may actually be smaller than if terminated in 2020, simply due to SECURE Act age change rule? (no lump sums applicable to plan in question).

Defined Benefit Pension Plan non-owner participant is age 75 and terminates on 12/31 Suddenly I'm confused if there is an RMD requirement for year of termination (due by 4/1 of next yr) or if pension payments can simply begin 1/1 of subsequent yr?

as we approach restating plan docs, curious if there are thoughts about merging existing 401(k) and separate Money Purchase plans by the same sponsor? My initial reaction for long standing plans is to keep them separate. Though certain fees would be larger as applied to two plans, merging them might be complicated and risk prone.

Lou - first off, thank you for your time. The Partner has found a govt opportunity so is dissolving his practice. The firm has many partners and there is no effect on the plan which will be amended to change trustees to add another partner. As you point out, based on signficant account balance, participant cannot be forced out, but curious about legal circumstances of retaining balance in the plan when the ALC is dissolved. Your last point - I think the reason he wants to retain his balance is uncertainty over the new position in the long term.

General Partnership with individual ALC's and the main company's employees within a single PS plan. One of the member ALC's is terminating his relationship with the firm and leaving practice but would like to leave his account within the plan. I'm not sure if that is possible without having a formal entity anymore?

Vesting is not an issue. But yes, all reasons in favor of TPA's over CPA's administering plans. Ken - part of the point of my question is it is either: 1. Impossible to back to accurately determine specific balances, or 2. It could be possible, but would be quite costly to the Plan Sponsor.

Takeover 401k PS plan - never had a TPA apparently. There has never been tracking of balances by money source (401k & PS only). Terminated participant wants to take a full distribution. For tax purposes upon distribution only, does it matter that there are no defined balances between sources?

All I can see is fog today. Employee enters calendar year plan on 7/1. 401(k) limit remains the max (based on age) as long as the pay supports it within the partial year of participation 7/1-12/31 PS limit - I believe it also remains the max as long as the pay supports it within the partial year of participation? They Comp Limit would also not be prorated in the participation period. it's just when there is a short fiscal year that Comp and 415 are prorated? Just too foggy today to recall.