Jim Chad

Probablyyes if an extension was filed for the employer tax return and the document allows it.

FWIW The best approach I found was to freeze the MPP and after it was fully funded, terminate it. I encouraged people to roll to the 401(k) plan but since they all had the option to take the money, all of the Joint and survivor notice requirements went away.

Austin and Tom I have a similar situation. Thanks for all of the information. My brain seems to be a little foggy right now. Are you saying the employee has met the eligibility requirements on the rehire date of 4-21-10?

My question is am I still exempt from Top Heavy requirements under the following circumstances: Dual eligiblity in this case means 30 day wait to defer and 1 year of service to receive 3% SHNEC 1. I have dual eligibility. Does that take me out of TH exemption all by itself? 2. I have dual eligibility and I pass coverage by testing separately those with less than one year of service. Am I exempt from TH? 3. I have dual eligibility and I pass coverage testing all employees as one group. Am I exempt from TH?

If this had been done on paper with a forged participant signature, who would be out the $9,500?

I do not know of a way to do this that would not disqualify the SARSEP.

I have heard at several seminars that the DOL was asked this question:"What about my two clients that don't use computers?" And their response was" They can go to the public library or ask the 12 year old next door." Does this mean they can share their credentials with the "12 year old next door" but not with me?

Ditto

Here are the alternatives I see the employer having to choose among: 1. Have a plan that will not pass DOL or IRS audit. 2. Tell the leasing company to figure out how to do it or get another leasing company. 3. Somebody pay a CPA to do her payroll. 4. Have the leasing company reduce her gross compensation and pay a CPA to do "zero net checks". This is an ugly workaround. The w-2 will probably be screwed up at least half of the years.

One other question: Does the document exclude leased employees? If it does, do you pass coverage testing when including her as a zero? If the document does not exclude her, you are legally required to let her defer and give her the Safe Harbor contribution.

I think that she may be an employee of the medical practice for Qualified Plan purposes. She might will be a worksite employee. Rev Proc. 2002-21, I think will have your answer. But I highly recommend Derrin Watson's book "Who's the Employer" It is much easier ot understand. Whether she defers or not, you need to know if she has to be included in testing.

Jean, it seems fine to me. FWIW

I feel like getting on my soap box here. So please bear with me. The tax code doesn't ever say anyone can put 100% of pay in a plan. It says no one can exceed 100% of pay. That is section 415 of the code and is often called the annual additions limitation. Section 404 say what is deductible. The short version is that deductibility limit for Defined Contribution plans, the employer contributions cannot exceed 25% of the compensation of the Participants. Deferrals are deductible separately. This same silliness applies to due dates also. There are several of them in different parts of the code. You gotta love tax simplification!

Last week I attended a 4 hour session on 5500's by Janice Wegesin. About one hour was on Sced C. I thought she did a great job, as always. This was ASPPA of Detroit.

The only way I have ever heard of this being handled is to ignore his 401(k) deferral for any pay there is not enough to do the full amount. Has anyone else heard of anything else?

Thank you, everyone.

Tom: we are looking at retroactively amending the Plan to let one HCE's deferrals, from last year, stay in the Plan. I won't hold you to this, but is it your best guess that the IRS would think this is reasonable?

Everything I have read and heard about this said the answer is no. The extension has to be filed before the return is filed.

Let's change this question a little. Going forward, we are amending so non owner dentist is not excluded, so he will get a Th contribution. Does anyone think we can amend now to let him keep the deferrals for 2009 in the Plan? I understand the TH contribution will be required for 2009.

I think it is that simple. Cafeteria Plans with 100 or more Participants have to file a 5500. If less than 100 participants, cafeteria plans don't have to file. I take that back, it may not be that simple. If there is a 401(k) Plan in the cafeteria plan, the 401(k) Plan would have to file a 5500. I have never worked on one of these. Does anyone know if the inclusion of a 401(k) plan would make the cafeteria plan have to file too?

Is there any way to exclude a non owner dentist from TH and let him defer in a Sole Prop? Details are as follows: The plan was amended in 2007 to exclude non owner dentists. When I took over the Plan late summer, I did not get this amendment. So I told him he could defer. When I went to do cross testing, I called the attorney who drafted the doc to see if there was any provision to put him in his own group. Yesterday, I saw the amendment to exclude him. I can't find anything in EPCRS to say how to correct this problem. A late amendment is supposed to affect mainly NHCE's. This will affect one HCE, only. Also, EPCRS talks about someone deferring who was not eligible because of age or service or not passing an entry date. I can't find where any excluded class is mentioned. All I can think of is refund all of the money including gains. Am I missing something in Rev. Proc. 2008-50 or does anyone know of anything else?

Lori: One other thing about including or excluding deferrals: If the owners are over the $245,000 of comp, there comp is not reduced when you exclude deferrals. This can change the proportions on ADP test and some other things, too.

Hi Austin Yes I have done this and because of the few loans I have, it has not been too much of a problem. So far I have just put a note in my Franklin planner for when the payment can reduce. When the time came I was lucky enough that payments were made as expected. And it wasn't too bad to send a note to payroll.

Has anyone seen anything in writing saying that the 2008 paper form, filed for short years with due date after 12-31-09, will not be rejected? Or even heard anything new?

I have mostly thought that once the check is issued and mailed, I'm done with the distribution. But we received a list of 15 checks that were not cashed. They were issued from 2003 to 2007 and range from $36 to $700. I am trying to understand the responsibility of the Employer. (This is a great client who will pay my hourly fee without complaining. But I don't want to charge him for unnecessary work.) What is the minimum required? Should I just go through the whole process I would for a terminated employee that has moved? Or can I just move these into an auto IRA? Any thoughts would be appreciated.