RatherBeGolfing

Are you talking about filing an amended 2023 return before they fix the errors they are now aware of? They would be knowingly filing with incorrect information, or am I missing something?

🤣🤣🤣 Thanks I needed that today!

Artie, thanks for the correction!

It requires a common paymaster scenario, so I assume the good reason would be that you can just use the issued W-2 rather than breaking out how much each entity is actually responsible for.

You are correct.

Scroll down on the page. You have to file the form first with DFVCP box checked. After about 24 hours, you can proceed with the DFVCP app. With a recent update, you now enter EIN and PN, and the website will populate the details and calculate the penalty.

Possibly, but I also wouldn't be surprised if its 99% AI. Amazon is getting flooded with AI generated books in all categories. I haven't looked at the books in question, but the 50-100 page appears to be the sweet spot in non-fiction. If they are accurate and people find them helpful, I'm not necessarily against it. I do worry about AI trend and accuracy though, I have seen ChatGPT come up with some scary stuff when asked basic questions. Last week an advisor asked a question about a company having more than one plan in the same year, and ChatGPT said it was a violation of the exclusive benefit rule...

We will delay as long as we can, but will timely deliver notices with the current limits if the new limits are not available. We will then update as needed. Its not ideal but manageable for us. I don't like the idea of estimates in notices.

As long as they are otherwise eligible, the fact that they filed under DFVCP for 2020 does not restrict them from using the program for subsequent failures.

It sounds like they are trying to say that Part-Time Employees are excluded, but a PTE that works 1,000 hours in the first year or 500 hours in 3 consecutive years will not be excluded. My concern with this language is that the 1,000 hours is limited to the first year and the 500 hours for LTPTE is 3 consecutive years which was later changed to 2 consecutive years. Is it also applied to all contributions? Is there another provision limiting LTPTEs to deferrals?

We are going to party like its 2027. This is going to be process-heavy, and it does not make sense for us to have one set of rules for 2026 and then change them for 2027. We will likely find issues in 2026 that will inform us on revisions for 2027, but we want to stay consistent. Side question, is anyone considering a defaulting catch-up to Roth, and requiring a participant to opt out? It is clear that a participant must be allowed to make pre-tax contributions in order to designate them as Roth contributions, so you can't require that catch-up can only be made as Roth. But default with an opt-out to pre-tax with appropriate notices and disclosures could limit the need for corrections.

A lot of early articles were drafted using an AI summary of the final rule I bet... I had a few different ones summarize for me and all said 2027. Its not always best to be first to publish!

Recent thread on this. In short, you must comply with the Roth catch-up requirement in 2026 on a reasonable and good faith basis, and you must comply with the final rule in 2027.

I would agree with this interpretation if all notices were consistent. For example, If you have the information necessary for the communication in the SPD, but then have a subsequent annual notice with more generic language like "The Company may, in its sole discretion, make a matching contribution on your behalf...", it would be an issue.

@Peter Gulia the IRS uses the term "communication" rather than "notice". The timing of the communication is no later than 60 days after the last discretionary match has been deposited for the plan year. I don't see how you can comply with the timing requirement by simply putting it in the SPD. Are you anticipating distributing an SPD each year after the last deposit for the year? There is no model communication, so any communication that satisfies the required elements (timing and content) would suffice. Also, there is no statutory or regulatory requirement for this communication. The notice requirement language was included in Cycle 3 plan documents as part of the compromise discussed above. Failure to provide the communication (if required by the plan document) would be an operational failure.

Ferenczy Benefits Law posted a flashpoint yesterday highlighting that the Roth catch-up mandate is still effective in 2026. Link to article Shoutout to @Ilene Ferenczy *Edit to add that Spark also released a summary stating that good faith compliance is required for 2026.

Indeed it is, thanks Bill.

Ok. Well, the 5500 is the easy part. EZ for years when no employees were covered, otherwise SF. The user fee is capped at two years, so the penalty for late 5500s shouldn't exceed $2,500 assuming at least two EZs and two SFs (2x$500 +2x$750).

If you are just asking which form to file, you file an EZ for the years it was a one participant plan, and an SF or (5500 with Sch I) for the years when it was not a one participant plan. I would take it to an ERISA attorney ASAP. Can he even afford to "save" the plan considering all the issues?

Yea, I'm seeing a lot of people say that the final rule permits or allows a plan to incorporate Roth cacth up prior to the applicability date using a reasonable, good faith interpretation. I have yet to see anyone say that you must comply with the statute prior to the applicability date. It sure sounds like you would still have to comply though...

So.... They don't need to extend or modify the administrative transition period because there is now a final rule with an applicability date?

I agree.

It's scary how many plans don't do this. We also require photo ID, verify bank account ownership for ACH, and more. People are sometimes unhappy with all the hoops we make them jump through, but most accept that we are trying to protect them as much as we are protecting ourselves.

The reg does not refer to small or large plan. The safe harbor is available to plans with fewer than 100 participants. The methodology for counting participants for audit threshold purposes does not impact the availability of the 7 day safe harbor. Your plan does not qualify for the safe harbor.

Yea, but you would need to spend the money on development if it was enforced, so does forcing the IRS to enforce the law change anything? I think that is what Peter is hinting at in his question. What is the injury if enforcement means you need to spend the money anyway? I dont disagree with you with you though...