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Bri

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  1. Like
    Bri reacted to Lou S. in TIN Application and Form 945 filing Notice URGENT REQUEST TO THIS GROUP   
    I think you can send in a letter stating "no distributions from the Plan ever, Form 945 not required"
  2. Like
    Bri reacted to Gary Lesser in SEP established incorrectly?   
    Never going to happen. Trustee or custodian MUST issue 1099-R if a distribution (serious penalties for not filing and another for not furnishing**). There was/is no employer and there is no SEP (because employer was ineligible). The distribution s being made from an IRA. His or her argument (basis) is with the IRS. The basis in an IRA is "[g]enerally...zero."" [See Conference Committee General Explanation,* ERISA Sec. 2002, see "Taxation of distributions--in general"]
    But what about the 6% tax on excess contributions (on amounts over his allowable limits)?
    The amount contributed over the amount "allowable" as a deduction ($0) may also be subject to the tax on nondeductible contributions (IRC 4972). But see 4972(C)(6) exception "[i}ndetermining the amount of nondeductible contributions for any taxable year, there shall not be taken into account—...so much of the contributions to a ... simplified employee pension (within the meaning of section 408(k)) which are not deductible when contributed solely because such contributions are not made in connection with a trade or business of the employer."
    Under the EPCRS VCP there could be sanctions. The defect (ineligible employer) is not eligible for SCP. 
    Hope this helps. ~~Gary
     
    * See CCH, Pension Reform Act of 1974--Law and Explanation, p. 368.
    ** See  IRC 6721 and 6722.
     
  3. Like
    Bri reacted to Peter Gulia in ACP refund due... but this year's match not deposited yet   
    I don’t know what might be correct or incorrect on the underlying question. But here’s an observation:
    In situations in which a recordkeeper seeks to impose its rule despite the plan administrator’s readiness, after it considers a lawyer’s or other practitioner’s advice, to deliver a written instruction (one within the service agreement) and even expressly indemnify the recordkeeper for following the instruction, we sometimes remind the recordkeeper that:
    they say they do not give tax or other legal advice, and
    they say they lack discretion to administer the plan.
    In my experience, the recordkeeper’s reluctance to process a proper instruction fades quickly.
  4. Like
    Bri got a reaction from WDIK in Participant Opts Out (waives out)   
    IF the employees 1-6 listed above are truly all 6 of the employees in the plan, then go with a safe harbor 3% nonelective, but indicate the sponsor will only allocate it only to NHCEs.  If there really aren't anyone but those six HCEs, then you'll have manipulated the top heavy exemption for SH plans perfectly, no?
  5. Like
    Bri got a reaction from Luke Bailey in Participant Opts Out (waives out)   
    oh then the daughters are HCEs as well, so your HCE average is going to be one-third whatever rate the owner actually contributed.  Very good for testing purposes indeed.  Unless you've got a top heavy plan, you might indeed be able to not require any further employer contributions.
  6. Like
    Bri got a reaction from Lou S. in Participant Opts Out (waives out)   
    IF the employees 1-6 listed above are truly all 6 of the employees in the plan, then go with a safe harbor 3% nonelective, but indicate the sponsor will only allocate it only to NHCEs.  If there really aren't anyone but those six HCEs, then you'll have manipulated the top heavy exemption for SH plans perfectly, no?
  7. Like
    Bri got a reaction from Luke Bailey in After tax contribution in testing.   
    You understand it correctly - the ACP test includes anyone eligible for either the match or after-tax arrangement, so if they all *could* have done after-tax, they're in.
  8. Like
    Bri got a reaction from Lou S. in Participant Opts Out (waives out)   
    oh then the daughters are HCEs as well, so your HCE average is going to be one-third whatever rate the owner actually contributed.  Very good for testing purposes indeed.  Unless you've got a top heavy plan, you might indeed be able to not require any further employer contributions.
  9. Like
    Bri got a reaction from CuseFan in After tax contribution in testing.   
    You understand it correctly - the ACP test includes anyone eligible for either the match or after-tax arrangement, so if they all *could* have done after-tax, they're in.
  10. Like
    Bri reacted to Paul I in 401(k) and Union Plan   
    If the union employees have not met the requirements to be able to take an in-service distribution, the employer can work with the union to coordinate a trust-to-trust transfer of accounts from the employer plan to the union plan.  Part of that coordination may involve amending one or both plans to have provisions facilitating this approach.  The union can decide what provisions in the union plan will be applicable to the balances received into the union plan.
    The key point is making this happen is between the employer and the union, and is not directly between the employer and the union employees.
  11. Like
    Bri reacted to Lou S. in Deferrals > net s/e comp   
    He can not defer more than 100% of compensation, you can't defer what you didn't make but an employer allocation can bring him over 100% but it being a sole prop...
    With such low comp the math gets circular if you are trying to do the absolute max. You'll need to do a PS contribution first which can't exceed the 25% deduction limit so using your $26,900 figure you get a $5,380 PS contribution which reduces his pay to $21,520 of which he can deffer 100% and the last $5,380 would be catch up. For a total of $26,630. Or he could do no PS and contribute the full $26,900 as deferral.
    It doesn't matter if the deferral is traditional, ROTH or a mix.
     
  12. Like
    Bri got a reaction from Luke Bailey in Whose responsibility for 1099?   
    So recordkeeper 1 decided that since the check went stale, they wouldn't do the 1099-R? 
    If the check had been written in December would they still be waiting for it to clear before deciding to issue the 1099 for last year?
  13. Like
    Bri reacted to CuseFan in S Corp plan   
    If you're asking about for the owner the answer is ZERO. Only W2 pay counts as compensation and qualifies the owner as also an employee. You also have an issue with requirement for S-corp owner/employees to take a reasonable salary.
  14. Like
    Bri reacted to Lou S. in S Corp plan   
    You don't say what type of plan or if there are other employees involved, but if the owner does not have any W-2 compensation than their 415 compensation from the S-Corp is $0.
  15. Thanks
    Bri reacted to CuseFan in SHNEC/New Comp - ppt eligibility for PS - include them in New Comp calc or not???   
    Agreed - and still boggles my mind that such plans continue to have 1000 hours and last day requirements when those are superseded by gateway and testing requirements. 
  16. Like
    Bri got a reaction from bethp38 in SHNEC/New Comp - ppt eligibility for PS - include them in New Comp calc or not???   
    In for a penny (3%), in for a pound (gateway rate)
  17. Like
    Bri got a reaction from jsample in SHNEC/New Comp - ppt eligibility for PS - include them in New Comp calc or not???   
    In for a penny (3%), in for a pound (gateway rate)
  18. Like
    Bri got a reaction from Bill Presson in SHNEC/New Comp - ppt eligibility for PS - include them in New Comp calc or not???   
    In for a penny (3%), in for a pound (gateway rate)
  19. Like
    Bri reacted to Bill Presson in SHNEC/New Comp - ppt eligibility for PS - include them in New Comp calc or not???   
    Are they getting SHNE? If so, they have to get gateway also. 
  20. Like
    Bri got a reaction from austin3515 in Super fascninating question - Owners Child is an LTPT   
    Maybe plan sponsors will no longer list their spouses with 1000 hours every year only to justify their deferring.  Put them in at 501 and it's more believable, too.  I'm sure we've all seen the spouse deferring 92.35% of pay and attempting to ruin a perfectly good average benefits percentage test.
  21. Like
    Bri got a reaction from EMoney in Super fascninating question - Owners Child is an LTPT   
    Maybe plan sponsors will no longer list their spouses with 1000 hours every year only to justify their deferring.  Put them in at 501 and it's more believable, too.  I'm sure we've all seen the spouse deferring 92.35% of pay and attempting to ruin a perfectly good average benefits percentage test.
  22. Like
    Bri got a reaction from ugueth in 414(s) Compensation Test on Deferrals   
    Do your actual testing with a definition that does pass 414(s) then, even if the allocations were done with the comp definition you were given.  If you can pass with gross 415 pay, for instance since that passes 414(s), then you should be in the clear.
  23. Like
    Bri got a reaction from acm_acm in 414(s) Compensation Test on Deferrals   
    Do your actual testing with a definition that does pass 414(s) then, even if the allocations were done with the comp definition you were given.  If you can pass with gross 415 pay, for instance since that passes 414(s), then you should be in the clear.
  24. Thanks
    Bri reacted to Paul I in Interpretation LTPT   
    Is the purpose of these resolutions solely to document a plan sponsor's choices for LTPT employees receiving other contribution types in addition to 401(k) deferrals?  Or, is the purpose to have a resolution adopting an interim plan amendment?
    Either way, I think it is a bad idea for a plan to say LTPTs get the other contribution types by default unless the sponsor elects otherwise.  If the plan sponsor felt before SECURE some part-time employess should get the other contributions, why did they exclude them before there were LTPT rules?
     
  25. Like
    Bri reacted to C. B. Zeller in Is this 11(g) amendment discriminatory?   
    You are correct. In order to satisfy the requirements of 1.401(a)(4)-11(g) (and 1.401(a)(26)-7(c), it's oft-ignored sibling), the amendment must pass coverage and nondiscrimination testing on its own.
    The way to bring in the HCE (presumably with a 0.5% accrual) under a retro amendment would be to also increase accruals for enough NHCEs to pass the ratio percentage test in the same amendment, also with 0.5% accruals for each (on top of whatever they earned in the plan under the base formula).
    This issue will largely go away next year when SECURE 2.0 retro amendments become available.
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