Bri

The EOB has an explanation of "dual status" in the coverage section. It sounds as though it addresses hours of service in a non-union capacity specifically and the pay associated with those.

Agreed. (I'll have to verify with our forms folks...)

Thanks - 415 isn't an issue. So I did basically 180 myself, and realize the 10cc amount governs the 417e conversion, even if the separate life conversion would have a higher underlying 417e value.

It's that the plan's AE table of factors doesn't govern the lump sum payment, just the conversion to other annuities. I'm concerned I might be erroneously applying the 415 methodology (where you have to convert anything different to the SLA to check the maximum) to 417e. So you're saying that I apply 417e to the life annuity amount even if it's higher than 417e as applied to the normal form. (thanks!)

Quick question - Plan has its own table to convert the normal form of "10 years certain + life" to other forms, including single life annuity. For 417 purposes, do I do the lump sum first by: a) Convert 10cc to life via the plan factors, and then convert the life amount to lump at 417 rates, or b) Convert 10cc to lump with 417e factors, but convert 10cc to life separately with plan factors (even though the lump sum value of that life annuity would be different?) Thanks in advance (and presume the plan's AE factors aren't going to override 417 minimums) --Bri

Sometimes plans will allow in-service distributions, and a subset of those will allow them specifically/solely for RMD purposes. That could open up the opportunity to withdraw at least an RMD amount if not more.

I agree with Bird - the "year" in question probably refers to the RMD year, as opposed to a plan year. As for finding out, I suppose it would be part of the year-end data collection questionnaire to confirm ownership, and if anything has indeed changed, then you'd go back to confirm dates of the ownership changes.

I believe limited scope refers to the CPA's ability to rely on previously prepared financial statements regarding the underlying investments (like if everything's in a group annuity contract with John Hancock, for instance). Might have trouble applying that to an ESOP.

Yeah, but that's 2024 if they're smart enough to only count the years after 1/1/2021.

Up to 5.7% of pay up to $0, plus the non-integrated piece. Yup.

I don't think having an EIN for your sole proprietorship prevents you from applying the earnings paid on your 1099 under your SSN. Your Schedule C will have lines for both your SSN and EIN. Which would mean you have no other steps to take regarding the plan sponsorship.

Often though, the "plan B" eligibility provision, the 1000 hours in 12 months, requires the full 12 months to elapse like a traditional Year of Service requirement, so it's possible the guy who hits 1000 hours in month 8 doesn't come in until after the full 12 months elapse. So as CBZ said, definitely check what the doc says to that effect.

Maybe they meant it as plain pro rata and didn't know how to skip the integration question of their document software. Because that's what they end up with basically, right? Up to 5.7% of the first zero of wages. Either that or they have employees with negative earnings (they PAY us to work here!) and therefore are below the integration level. 🤷‍♂️

That's what I'd tell the guy. And they'll be 415-limit catchups so not in any of your testing.

Well, I don't think you need to actually put SH provisions into a one-man plan, but if he wants to burn off the 58,000 of transferred assets, then sure, he can put 6,500 as his deferral election some time in the next week or so.

This IRS website page (blah blah blah not official guidance disclaimer dot dot dot) confirms it: https://www.irs.gov/retirement-plans/deadline-extended-to-add-new-in-plan-roth-rollover-provisions

That's clearly a reference to Bill S. Preston, Esq. there, rather than Mike. 🙂

I think Chapter 10 is dedicated to permitted disparity (it's got to be the shortest chapter along with vesting and 415), and a quick peek does have some illustrations to the calcs.

I'll "fourth" it, just for giggles.

Ha, I'm going to naively say just write to the IRA custodian mentioning the fact pattern and see if they'll do what you tell them! (I suppose in this case, issue the 1099-R only for the taxable gain/loss, since the plan would be issuing the form relating to the 5,000.)

If the person's below the covered comp level, it's the lesser of 1) original EBAR times 2, or 2) original EBAR plus the disparity factor from a big table based on the plan's NRA and the individual's SSRA. If the person's above the covered comp level, it's the lesser of 1) annual accrual / (comp - (50% times covered comp)), or 2) (annual accrual + (disparity factor x covered comp))/ compensation

The thing I always remember is that in your 410b test, you have to test using the lowest eligibility standards, so they've just created some non-benefiting NHCEs who didn't get to start early like our lucky one. However, people like these are generally otherwise excludable, and "probably" don't screw up 410b in general, if you do test separately.

Yes on one, no on two.

Is this a new plan? Could then, perhaps, start the deferral portion as of February 1.

I think that's the way to look at it, you don't double-attribute Grandfather through Father, to Minor.