RatherBeGolfing

It shouldn't, but it is possible that you will get a "reminder". That said, the DOL is usually easy to deal with in this type of situation. A quick phone call or even email will clear it up.

Great advice!

The hardship wasn't two years ago, it is still ongoing. Under safe harbor rules, its expenses for or necessary to obtain medial care. The expense still exists. 5 or so years ago, we took this a step further and asked a IRS panel the following: If a participant financed the medical care via credit card or medical loan service, is there still an eligible hardship (since they were able pay for it through other means)? Panel said yes, it was the expense of the medical care that triggered the hardship. Taking a hardship distribution to pay a credit card used to pay for medical care was still a hardship within the safe harbor rules.

I'm not sure if you have just misunderstood the question here or if there is more to it on your end. If you think that not speaking or understanding english is going to prevent people from finding employment, you need to seriously reconsider. As Bill points out above, the plan is required to post notices in other languages if there are enough employees who need it in order to understand the notice. You cant just say "sorry, you need to learn english!" Maybe it's a product of where you live and work. I'm in the Southeast, and non-English speaking employees are just not uncommon here. In my immediate practice are, we have large communities of Spanish, Creole, and Tagalog speakers. Also consider the employees who are studying to learn English but still only have limited understanding of the language. It may be your clients responsibility to put things in a language that they do understand.

I have been outlining this for a bit, and I think that your plan is an example of a plan that will file a Form 5500-EZ but is subject to both bonding and PBGC requirements (unless it is exempt as a small professional service plan) . Remember, PPA 1103 simply modified the filing requirements, it did not amend the definition of an employee benefit plan (§2510.3-3). It is still an employee benefit plan covered under Title I (the children are only treated as partners for filing purposes). §2510.3-3(c) For PBGC coverage, a plan would be exempt if it is established and maintained exclusively for substantial owners of the plan sponsor. A participant is a substantial owner if, at any time during the last 60 months, the participant: Owns the entire interest in an unincorporated trade or business, or In the case of a partnership, is a partner who owns, directly or indirectly, more than ten percent of either the capital interest or the profits interest in such partnership, or In the case of a corporation, owns directly or indirectly more than ten percent in value of either the voting stock of that corporation or all the stock of that corporation For substantial ownership purposes, we have to apply attribution under §1563 (not 318 that we applied for filing purposes above). Under §1563, an individual who owns more than 50% directly or indirectly through other attribution is considered as owning the stock owned, directly or indirectly, by or for his parents, grandparents, grandchildren, and children who have attained the age of 21 years. The adult children are not attributed the ownership of the 100% S-Corp owner. The adult children are not substantial owners. No PBGC exemption for covering only substantial owners. I think I have worked out the differences between filing purposes, bonding requirements, and PBGC coverage correctly, but I would appreciate any input or corrections if I'm wrong.

I think it should be pointed out that it is a little more involved than just filling out the form. You need to put procedures in place to prevent it from happening again. It is entirely voluntary to correct using VFCP. Just be aware that they will probably start an investigation if you do not. When an earlier round of these letters came out 4-5 years ago (maybe more), ASPPA GAC protested the threatening tone of this "invitation to voluntarily participate". I believe the DOLs answer was that it would change some of the wording, but the message was that they were aware of a possible PT and an investigation may follow. @Stash026 would you be comfortable sharing some more detail? Like date of the letter and what regional office it came from?

That is my understanding as well. The reasoning behind making up the difference in a subsequent payroll is that the election and calculation is still valid based on the eligible comp. In theory ,contributing the remainder of the 1/1/XX 401k contribution on 1/15/XX is ok because 1/15/XX is when the cash is first available to be deferred (for the remainder). It isn't a late deferral issue since it was separated from employer assets as soon as reasonably possible. It was also contributed before it was received by the participant. Again, this is how it was described to me, I think at a seminar or session of some sort. The only restaurant plans I have either collect tips and pay them out with the wages or the establishment does not allow cash tips at all (members only club where everything is billed to the member at month end).

Here is a workaround I have heard before: wages and tips are comp for plan purposes deferrals are calculated on wages and tips the actual contribution can only come from the wages portion if the deferral exceeds available wages in any payperiod, the difference is contributed with the following payroll

It happens more than you would think. It does create an issue when you have benefits like 125/401 and you come up short. You cant just ignore a health insurance premium.

austin3515, personally I think the answer should be the same in both cases. The employer just couldn't fund the contribution by asking the server to pay over one of the $100 bills. I agree with you that the answer should be the same for both scenarios. Id like to throw in another twist though. Suppose that the wages portion is closer to a 50/50 split or maybe even less than the tip income. Also, suppose that the employee pays for health insurance and other optional benefits from the wages portion of the paycheck. When there are not enough wages to cover benefit premiums and elective deferrals its an even more complicated issue than the math of $80 vs $100.

I haven't seen this...yet. I don't think you are overreacting though. If they want to be PITAs, there are plenty of places to go.

I agree its a dicey issue, and you should have an employment law attorney draw clear lines of what you can and cannot do to make sure you stay inside the lines. That said, I think it is possible. The bigger question is is it worth the effort and risk?

Good on ya Dave! I know you guys put in a lot of work on this site, and advertising/job postings are usually the only ways to get compensated. That's a great goodwill gesture!

If you give them a schedule and assignments to perform, yea I agree. If the person can decide what assignment to accept and when to do them as long as done by the due date, it sounds more like a contractor.

I'll take a stab at it, and I could be wrong... If its a plan expense account, it is a plan asset because it is for the benefit of that plan rather than revenue sharing deposited into a service providers operating account. As a plan asset, it is subject to the qualification requirement that all funds are allocated to participants based on definite plan formula. This requirement then means that funds cannot carryover unallocated from year to year (same reasoning as the plan forfeitures). So it goes back to the Code.

Full accounting of what? What are they questioning and for what period? contributions? earnings? fees? Between SPD (or plan doc if necessary) and SAR/5500, they should be able determine whether contributions and gain/losses are correct.

Just as an FYI, reasonable cause penalty waivers are very hard to get nowadays. The reasonable cause better be damn good if you are going to gamble away your DFVCP eligibility. Like "all my plan records were trapped in the middle of disaster area and I filed the 5500 as soon as humanly possible after FEMA let us go get them" good.

No objection. I'm not sure how many would fill out employer specific information though. I think you would run into a "my opinion, not that of my employer" issue.

I agree with ESOP and Bob.

Agree with Lois. The extension for the IRA contributions flows with the due date for the return, so the IRS wouldn't need to address the IRA contribution deadline separately. That said, they most likely will address it in some way as we get closer to the original due date. Also, see today's posting on the SlottReport

Which Form 5500 do you file for your plan? 5500 or 5500-SF (owner and employees?) 5500-EZ (owner only or owner & spouse) I would not go attempt to get penalty abatement for reasonable cause as you risk making a simple fix more complicated. Instead, I would use the established correction program available for your version of the 5500. It includes a user fee but it is worth it. The 5500 and 5500-SF uses The Delinquent Filer Voluntary Compliance Program (DFVCP) through the DOL. User fee is $750 per late return. Penalty Relief Program for Form 5500-EZ Late Filers is available through the IRS. User fee is $500 per late return. Do you work with a TPA for your plan or do you do all plan related things by yourself? If you have a TPA, they can certainly help you fix the late 5500.

Same here. The TOS already prohibits commercial advertising through the message boards, so if it was "pay $50 for my webinar" it would be really simple. All the links seem to be to the CFPB website but I haven't seen a link that has been more than just tangentially related to this message board

What does the plan doc say? Definition of compensation? Does it allow for post year end comp? Would this have been eligible comp but for his termination (if P used his vacation days in 2020 and then terminated)?

As soon as you can reasonably segregate the deferrals from employer assets. Its going to depend on what the actual process for is, but for something on an ongoing basis, their excuse is not going to cut it. Reasonable is as soon as it should be possible given the facts and circumstances. For example, Owner is traveling and Assistant gets quarantined with Covid and cannot go into the office to mail a check to the plan. The delay is reasonable. Owner is traveling and only deposits once a month because he cannot be bothered to figure out a better solution (like travel with physical checks if they need his signature). Not reasonable. My rule of thumb, absent an unforeseeable intervening event, more than 3-5 days is not reasonable. If that happens every payroll, you should have figured out a way to improve your procedures.

No. No. You report the amount of repayments on Form 8915-E, from $0 to $6k. If you repay less than 1/3 of the CRD, the remainder of the 1/3 must be included in income. Its up to you.