LMOC

Summary - A plan has a payroll by payroll fixed match. They may want to amend the plan retroactively to allow for a match true up. Does IRS Regulations allow for a match true up essentially at year end retroactively to 1/1?

In relation to this same topic, can you amend a plan at the end of the year to allow a for a match trup retroactively to the beginning of the year?

Yes, masteff, you are correct. After review of an email I received, he has been receiving salary and should not have been of course. And the LLC has not reported profits or SE earnings. Therefore, he has contributed to the plan on salary he should not have received. If I find this is the actual case this afternoon, we will need to correct this of course. I know going forward he changes to SE earning he can contribute. I guess the correction can be receiving contributions back from the plan, taxes and such. (He has contributed ROTH only) OR correction of tax filings. ??? By the way, I LOVE THIS!!! Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra

He is the sole owner and actively involved. However, the LLC MAY not have reported profits or self employment earnings. We are having a call later this afternoon to get all the facts straight. I definitely want to confirm all the facts before going further.

Great! Thanks! I know that seems simple, but I just want to be sure. A CPA was disagreeing with it.

Thank you and it doesn't matter if the owner receives a K-1, but is actively involved in the company?

In what instance can the owner of an LLC participate in a 401(k) Plan? LLC is a single member LLC 100% owned by the the owner. Can the owner participant in the 401(k) Plan he setup for the employees of the LLC.

Thanks so much for your help, BG5150 and Lou S!

I know this is weird. The question came to me from a third party with very little information from the employer. My initial response was what are they trying to do? I said, if they are terminating the plan or the safe harbor contribution, yes notices are required. But, they didn't know if that was what they were doing. Let's say if it wasn't a Safe Harbor Plan, the Plan was not terminating and they were not going to a PS Plan, what is the responsibility of the employer if they decided to stop taking employee deferrals? Another option I just thought about was freezing the plan if they want to stop elective deferrals, but then that freezes everything. Thanks so much for your help!

This may seem like a simple question, but as you think about it, more questions come up. Is an Employer required to notify participants in a Safe Harbor Non-Elective plan that they will no longer take EMPLOYEE Deferrals? The Employer has not said anything about terminating the plan or the situation of the company.

Just amend the return.

A little different scenario for forfeitures. Can forfeitures be used to to cover negative contributions from a distributiuon match overpayment to a participant?