Belgarath

I believe the proposed regs say that if you have elapsed time, as long as the waiting period isn't longer than12 months, then LTPT doesn't apply anyway?

I believe that compensation for 415 limits includes comp from all employers participating in the MEP.

Yes, in 2025.

Retirement plan income. I expect it is in some kind of electronic limbo. If nothing happens in the next month I'll have to call the taxpayer advocate. Very strange - in the past, I've actually been shocked at how FAST it was processed! Maybe just an accumulated bad karma debt...

I'm finding this subject confusing, particularly due to the fact that some vendors/recordkeepers are handling the process differently, or their information is contradictory/confusing, etc. So, it is very clear that a QBAD is reported on a 1099 as a Code 1. A PLESA (which I hope never to encounter anyway) is treated as a qualified Roth distribution, and reported as such. For other SECURE/2.0 special distributions, it seems like a Code 2 is possible if the "AND YOU KNOW" clause in the 1099 Code 2 instructions is satisfied. Are you allowed to use a Code 1, even if you "know" - or if the employee certification doesn't convince you - you are allowed to rely on it, but are you allowed to REPORT as a Code 1, or MUST you report as a code 2 if you ostensibly "know" it qualifies? Other observations? Floundering a bit on this... Thanks.

Just curious as to what people may be hearing. Remarkably simple income tax return filed electronically end of January - IRS refund website confirms accepted January 31. Refund still not approved/processed. Return has 2 W-2's 2 1099's. That's it, standard deduction. In the past, these have been processed VERY fast. And everyone I know who filed at the same time this year got their refund processed and received very quickly. There's no option I'm aware of to actually talk to someone at the IRS who can say what the hold-up is. When I did call, the phone message was the EXACT wording that is on the "Where's my Refund" site. I just wondered if other folks you might know are encountering similar delays. It isn't anything critical - it's not like it is needed to pay bills or get groceries - it is just annoying!

It is 3 consecutive years, (technically 3 consecutive eligibility computation periods - watch this if you switch to plan year). Two, starting in 2025.

Yes, so would I.

Well, the position of the IRS is that the existing formula gives the participants a "protected allocable share" (i.e. IF an allocation is made for 2024, it must be pro-rata) and that such an amendment couldn't be implemented until 2025. I've seen arguments that the IRS' position is inaccurate, but I wouldn't want to fight that battle

Thanks Peter!

So, non-profit employer "A" sponsors a 403(b) plan. Employer "B" is a disregarded entity, but signed on as a participating employer to "A's" plan, on the advice of counsel, just to make things clear. Now employer "B" is breaking off from Employer "A" and is going to change to a for-profit entity as of the separation date. "B" is going to, probably, install a 401(k) plan, although probably not with us as the investment person is hyped on bundled arrangements. Que sera sera. It seems to me that this would be considered a termination of employment for these participants, and they would be eligible for distribution or rollover as they choose. Is my thinking on this flawed?

Interesting. I'm completely unqualified to opine on the legal technicalities - but what (for me) passes as common sense, leads me to ask why in the world would an employer attempt to litigate this when the only practical effect is allowing certain employees to defer ONLY - no employer contributions, top heavy, etc., etc.? Seems like the expense, and hassle, is the losing end of a bad deal.

I tend to agree, but I would defer to ERISA counsel. Depending on the timeframe involved (going back for how many years) there could have been lots of changes in the beneficiary populations - death, divorce, marriage, etc. - and I don't know what effect that might have. Also, the amount of money involved may have an effect - if small, the tendency is to take more "risk" for the sake of administrative sanity, whereas if the amount is large, more caution is usually exercised.

And if you handle 403(b) plans, that's an additional workload (restatements) that hits sooner.

The amendment date should be after the date the practitioner is planning to retire.😁 (If there is anyone reading this who doesn't have a sense of humor, please ignore the above comment) But seriously, to a certain extent the amendment date may also be driven by other factors - staffing, number of plans, other projects such as restatements, etc.

Thanks Peter!

I'm looking at a 457(b) document and adoption agreement specifying that payments must commence no later than April 1 following date of termination. Obviously done back when that was the required beginning date. I just want to confirm - for a 457(b) plan, I assume it is still ok to retain this provision, (if they want to) even if RMD date for active participants is the new 72 or 73, depending upon DOB?

Well, I guess there is a fine distinction sometimes between "knew" and "understand." I would say that they "knew" but I doubt they really had an understanding. Honestly, I don't know the arguments AGAINST including QDRO provisions - my general thought would be, "Why not?" I'll be interested to see how the discussions here play out.

My experience in this arena is limited, so I can't really address your questions. I can say that all the 457(b) plans for tax exempt or governmental that I've seen include QDRO provisions.

If the DFVCP filing is done promptly, it won't be anywhere near $750 - more like $250-$300. Go the the DFVCP calculator and enter the appropriate information. IMHO, absolutely file under DFVCP in this situation. The amount is so small that it overrides the hassle of requesting relief, even if you would be "guaranteed" to get that relief.

I figured some people might get that reference.

Ok, thanks!

Let me see if I can give you accurate information pertinent to the question. XXXX is the business sponsoring the XXXX plan. Joe Schlobotnik is a 70% owner of XXXX, which is an LLC taxed as a partnership. Joe has ownership in some other LLC's taxed as partnerships, but not considered a CG nor an ASG. None of the other LLC's are signed on as participating employers. ???

So, I'm not a CPA, and I wondered if this statement from a client's CPA makes sense, where there are two or more Schedule k-1's, but not a CG/ASG, and there are no participating employers? To me it seems odd, but perhaps it is perfectly normal: The K-1 from that (other LLC) will have a substantial effect on his K-1 from (XXXX), but it won't change his earned income from (XXXX). His 2023 self-employment income from (XXXX) is expected to be ($$$$$) prior to employer contributions and reduction for self-employment taxes.

So, the wording in IRS Notice 2004-2, Q&A L-2, and similarly in Q&A L-9, seem to contemplate the taxable year when "allocated" in a different manner than the normal interpretation of "allocation" for valuation, deduction, and 415 purposes. In this case, "allocation" seems to be synonymous with "deposited" or "contributed." Which makes sense - since it has to be reported on a 1099, how could it be done otherwise if the employer went on extension, and the employer contribution wasn't made until September, for example? Any other thoughts on this? Q. L-2: If an employee designates a matching contribution or nonelective contribution as a Roth contribution, for which taxable year is that designated Roth matching contribution or designated Roth nonelective contribution includible in the individual’s gross income? A. L-2: A designated Roth matching contribution or designated Roth nonelective contribution is includible in an individual’s gross income for the taxable year in which the contribution is allocated to the individual’s account. The preceding sentence applies even if the designated Roth matching contribution or designated Roth nonelective contribution is deemed to have been made on the last day of the prior taxable year of the employer under section 404(a)(6) of the Code.