wmyer

Can anyone provide me with a working web site link to information on mandatory state tax withholding? Alternatively, if no known web site exists, can someone provide me with a hard copy of state withholding requirements or point me in the right direction to finding out more?

Yes, a SIMPLE 401(k) is also required to file a Schedule T.

I completely agree, except that April 16, 2001 would be the deadline for year 2000 IRA contributions because April 15 falls on a Sunday.

There's a SAMPLE SAFE HARBOR NOTICE available on this site: http://www.corbel.com/news/pensionupdatesd...etail.asp?ID=80. This site has separate notices for the non-elective, matching and the "maybe" non-elective contribution.

The 25% Section 415 individual limit does not apply to SIMPLE IRAs, but does apply to SIMPLE 401(k) plans. See Revenue Procedure 97-9, §2.06: "Except as provided in Section 2.02, all other qualification requirements of the Code continue to apply to a plan that contains 401(k) SIMPLE provisions including the contribution limitations of §415." However, the 404(a) deductible limits of 15% for profit-sharing plans and 25% for paired plans do not apply to either SIMPLE IRAs or SIMPLE 401(k) plans.

According to Notice 2000-3, Q-11 "an existing calendar-year profit sharing plan that does not contain a CODA may be amended as late as October 1 to add a CODA that uses a 401(k) safe harbor method for that plan year." Since there are two safe harbor methods, and 2000-3 uses the word "a," this can only be interpreted that the plan can use either one. The Notice goes on to say that "A similar rule applies for purposes of section VI of Notice 98-52 in the case of the addition of matching contributions for the first time to an existing defined contribution at the same time as the adoption of the CODA."

Salary deferral principal is eligible for hardship withdrawal. However, the non-elective or Safe Harbor matching contribution is not. This is per and IRS Notice 2000-3. Additional profit-sharing contributions, if any, may be able to be withdrawn for hardship reasons. Also, if the plan allows after-tax contributions, the post-tax contributions could also be taken out prior to 59-1/2 etc.

If I have a Safe Harbor plan with the Safe Harbor matching option for salary deferral contributions, should I use characteristic code '2K' for this? '2K' would be used if the Safe Harbor match is considered a 401(m) arrangement; however, since the Safe Harbor match is not subject to 401(m) discrimination testing, is it really considered part of a 401(m) arrangement? The instructions DO specify that QMACs should not use the '2K' characteristic code, and the Safe Harbor match seems to me to have more in common with QMACs than with regular matching contributions subject to ACP testing. How are other people reporting the Safe Harbor matching and, for that matter, with the SIMPLE 401(k) matching contribution on line 8(a) of the 5500 Form?

According to IRS instructions, the Schedule T is attached to any pension benefit plan's 5500 Form, including profit-sharing plans and stock bonus plans, intended to be qualified under IRC 401(a) or 403(a), not just cross-tested plans. An exception occurs when the plan is using the three-year testing cycle rule.

A client terminated an existing profit-sharing plan and opened a new plan as a non-standardized plan, but with no exclusions. What are the rules about amending the plan, at some point in the future, to a standardized plan? Cites to IRS authority would also be helpful.

Question 3 on the Schedule 'T' requests that we check "each statement" that describes the plan; however, the instructions say to check box 3a, 3b, 3c, "or" 3d. Can we check multiple boxes or should we check off just one box? If we are only checking off one box, what is the hierarchy for determining which box to check off? How are SIMPLE matching and non-elective contributions being reported in question 4(e)? Are they both considered "non-elective" or how is this being treated?