pmacduff

The profit share and match eligibility is listed in the AA as age 21 and 1 year (1000 hours) of service. Plan entry dates are the same for all contributions (quarterly following). Allocation conditions for profit share and match are age 21, 1000 hours, employment on last day. Just trying to wrap my thoughts around the fact that although she is already a plan participant on 12/31/2013 & met the allocation conditions for profit share and match she's not eligible for profit share or match until after 01/01/2014. FWIW I do have source eligibility/entry dates/etc coded into Relius and it gave her both match and profit share. I must have something coded incorrectly if she should be excluded for 2013. I will review the specs and census data again. Thank you for your thoughts.

Have a plan with 90 day eligibility for deferrals. Entry date is the first of the quarter next following. (no exclusions) Plan has match and profit share with allocation conditions of age 21, 1000 hours, last day. Plan excludes keys from TH minimums. One of the partner's children has worked there continuously since 2009. Entered the plan as of 04/01/2010. Did not work over 1000 hours in 2009 ,2010, 2011 or 2012 but is age 21. Was excluded from the TH minimum in those years due to status as "key". Works over 1000 hours in 2013 and is employed on 12/31/2013. I believe this participant gets a full profit share allocation and match for 2013 because the requirements for allocation have been met. I have one of the large vendor administration teams telling me that she won't get PS and match until 2014. agree or disagree?

yes - my bad with the description, eh? The contributions are not tested but the participant is in the tests at $0.00 and 0%. just tired already I guess......

Thank you Lou. I was trying to find something like what you attached. The plan is a 401(k) plan that has been around for some time with only 401(k) and safe harbor non elective contributions. Parents retired, son took over and wanted to make profit share contributions. For the fiscal year ending 09/30/2012 & plan year ending 12/31/2012 the client went on Corp. extension, determined, deposited and allocated a profit share amount well within all deadlines for Plan and Company. For the fiscal year ending 09/30/2013 the Corporate return was not extended and was filed by 12/15/2013. I am now working on the Plan for the 2013 calendar year. The client requested profit share examples and he wanted to know the deadline for deposit. Since he already filed the Corporate return (showing only safe harbor deduction, which was already made) can he make a profit share for the plan year 2013 but deduct it on the Corporate return for fiscal ending 09/30/2014? He tells me that this will be the method going forward so it will be consistent, but was not for that first profit share.

BG5150 - I found this but can't find the statement I underlined below in the Fix-It Guide. I'm going to go to the guide again later and try to find it. 401(k) Plan Fix-It Guide - 401(k) Plan - Overview - Internal Revenue ... www.irs.gov/.../401(k)-Plan-Fix-It-Guide--...‎ Internal Revenue Service Jan 22, 2014 - Any withdrawn amounts aren't considered in the ADP test and any ...Plans with the automatic enrollment feature must take steps to ensure that ... the employee's right to opt out and not have elective contributions made or ...

I know this is the most basic of questions but I have been struggling today: I have a non-calender Employer fiscal year that ends 09/30. The profit sharing plan is a calendar year plan. For the plan year ending 12/31/2013, when does the Employer deduct the profit share contribution he makes for 2013 and when is it due to the Trust? I remember way back when learning the basics and there was something on the off calendar fiscal clients about the "fiscal year ending within the plan year" or the "plan year ending within the fiscal year"?!?!? any help appreciated....

This is a large plan with an annual 5500 audit and the auditors want to balance to the W-2 reporting. The deferrals show on the W-2 and then the participant receives a 1099-R form from the vendor. I code the participant to be excluded from the ADP testing but neglected to override the match calculation and wanted to be sure that my thinking was correct.

I apologize if this has been asked, couldn't find it by searching... Auto enroll plan participant opts out within the 90 day window and is refunded her deferrals. End of the year arrives and Employer does a match. If she otherwise meets the criteria for match eligibility, is she entitled to match? I believe the opt out is as though those 401(k) contributions did not exist and think she should not receive match, but the software is "thinking" differently!

Kevin C - yes there were many changes by the IRS for PEOs in 2003. In fact, since 2003 this particular multiple employer PEO Plan has been audited by the IRS on 3 different occasions. The PEO got through each audit without any issues, either standard or PEO related. This is the first time they have come to me with this question, which begs another question for me...what have they done on similar new client plan takeovers as I suspect this wasn't the first!!

I did finally find reference to this situation in Sal's book. He provides some "Arguments for not treating leasing organization's plan as a successor plan." There was also a private letter ruling (PLR 200241054) where the leasing organization's plan was determined not to be a successor plan. Food for thought anyway.

thank you masteff. I like that you said "A more normal way is the prior year forms search function:..." because I would have thought that the 2013 instructions would be current year since the forms we prepare next month are 2013 forms, not 2014!

PEO takes on a new payroll client who will be signing on as a participating employer in the PEO 401(k) Plan. The client has an existing 401(k) plan with another vendor & payroll company. Does the client transfer or terminate the other 401(k) plan? I'm thinking specifically of the successor plan rules. Do those apply in this instance? Thanks in advance.

Anybody else notice on the IRS website that the instructions for the 2013 1099-R forms are not included? It jumps from 2012 to 2014. The actual 2013 forms are there along with the 2013 1099 General Instructions, but no form specific instructions for the "R" forms. I like to download the *.pdf files of the instructions so I have them handy for reference. Not a big deal I realize, just found this odd and wondered if anyone knew why?

Tom, since you did put a ? after your 1973.... "On July 2, 1980, President Carter issued Presidential Proclamation 4771 and re-instated the requirement that young men register with the Selective Service. At that time it was required that all males born on or after January 1, 1960 register with the Selective Service System." I only knew this because I graduated in 1980 and many of my friends and older siblings friends were required to register. I also won a bet with an older friend on this very subject because she was adamant that the last draft had been many years prior.

we had an IRS audit on a plan which was 6 "consecutive" months of service. With less than 1 YOS you have to use elapsed time so the IRS opined that the word "consecutive" is basically meaningless and the service spanning rules applied. Actually only ended up being a few employees that were missed for eligibility (rehires of course.) Corrected under SCP. That being said, from all of the samples I went through with the agent I would say that since this employee did not return within 12 months from initial DOH, the service spanning rules do not apply as BG5150 mentioned. SO....the participant starts over, needs to work for 3 months and would enter on the next entry date as defined in the doc.

The plan has no pending QDRO. The children are all grown. The plan balance is very small. My main concern was that we offer the ex spouse, as beneficiary, the proper options for the distribution. I think she thought she could roll to one of her own IRA accounts as opposed to a non-spousal IRA as required for a non-spouse beneficiary. thanks for the input.

She is the listed beneficiary on the most current beneficiary form, nice and proper, way after the divorce. (They divorced quite some time ago but remained friends and continued living together up until his recent death.) I'm not sure I understand the QDRO relate & would that really matter anyway at this point since she is getting 100% of the account? Or are you thinking he may have married someone else while living with his ex for all these years?

I have a situation where the participant's beneficiary is his ex-spouse whom he still lived with at the time of death. I would assume that she is treated as a non-spousal beneficiary for purposes of the distribution or rollover and required notifications? Also if rollling over she must roll to a non-spousal IRA as opposed to being able to roll to her own IRA as she would if she was still spouse? thanks in advance.

Plan does not allow for distribution from rollover accounts at any time only in the event of termination of employment and hardship. I did check the Plan - see my first sentence. it seems to be pretty clear in the Plan Doc, AA and SPD that 100% of rollover accts are allowed for hardship. Just trying to figure out how to get the vendor to process this and wanted to be sure there wasn't some obscure roth rule I didn't know .

Plan allows for hardship withdrawal of both 401(k) and roth deferrals as well as 100% of rollover accounts. One of the big 401(k) vendors is telling me that the participant cannot have 100% of her roth rollover account only the contirbutions. They apparently must have obtained an original contribution figure from the participant when she rolled the roth assets into the Plan. Other than the taxation issues for the participant is there any reason she cannot take 100% of her roth rollover account as hardship if the Plan allows? This appears to be a rare occurrence but I can't believe that this vendor has not come across this particular situation.

Attached are the pages from the Trust Doc (definition of comp) and the AA if anyone is interested. The fact that the client tells me that both Employer and Employee contributions to the HSA were included in the W-2 Box 12 amount & coded "W" is causing me some concern. Wouldn't at least the employee piece of the HSA be included in the gross compensation? Thank you again to everyone for your comments and insights! DOC061413.pdf

Thank you all for your replies. The client tells me that the Box 12 amount with Code W is the total of the Employer and Employee portions of the HSA contributions. These W-2 forms were prepared by a large national payroll provider. So - not subject to employment taxes I follow that....but is that figure part of gross compensation? Most are saying no?? I thought this would be straightforward but I'm not sensing that........

These ER contributiions are on the W-2 in box 12 with a Code of W as BG5150 indicates.

Thank you 12AX7 - yes - I am referring only to the portion paid by the Employer to the HSA. Do you know where I might find information i.e. your statement that "if certain guidelines are followed, the employer contribution portion to an HSA account is not taxable to the employee."? I've been all over the IRS website and looking through all the regs on compensation definitions. We believe per the definition in this document that only bonuses are excluded, however we have an auditor (5500 Accountant audit, not IRS) that is telling the client that the Employer piece of the HSA contribution should be excluded from the Plan Compensation for 401(k) and safe harbor match calculations.

Also posted this under HSA Accounts, but I guess it relates more to the 401(k) Plan! Plan compensation is defined as W-2 compensation plus all pre-tax deductions; excluding bonuses. Employer contributes to an HSA for the employee. Are the employer contributions to the HSA considered part of the employee's gross wages?