RatherBeGolfing

If the plan doesn't use the safe harbor definition of hardship, both could qualify. But neither meet the SH definition that is at question in the OP.

There is a difference between taxable income and wages reported in Box 1. The taxable income is $76,000, but the W-2 will show $75,000 meaning $1,000 has to be picked up as additional income. Even if you show $100,000 as deferrals in Box 12, the IRS will still only count $24,000 because that is the limit. The excess is reported so that the IRS knows to look for the corresponding distribution and taxes. You pick up the excess as additional income, not wages. Same as above, it is still counted as income but not wages for 2017 if distributed in 2018 (by April 15). That is why you use code P to show that it was taxed in a prior year.

Nope, there is no requirement to have that language in your plan. For an IDP with 100% vesting for all contributions, I wouldn't bother with the amendment. If the plan is amended in the future to include contributions that are not 100% vested, just add the forfeiture language at that point.

Depending on the arrangement and the catch, the income can be quite significant just working weekends. Each trip wont be a success but here in the gulf you are talking thousands for successful 2-3 day trip. He can easily exceed IRA limits working weekends and summer break.

Yes, because even excess must be counted for Box 12, and if it is in Box 12 it is NOT in Box 1. It is a deferral contribution even if it is excess, you just don't get the tax benefit of deferring compensation on the excess. Since it is a deferral contribution, it goes in Box 12 and is not in Box 1 as wages. This signals to the IRS that you exceeded the limit and must pick up the excess as additional income (even if you don't have a 2017 1099 for the distributed excess). So while it isn't in Box 1, the software should know (because the IRS sure knows!) that the excess is other income. You still pick up the excess as other income. The W-2 should look the same because you are required to list the excess as a deferral. As long as distributed by April 15, 2018 you would issue two 1099-R. One for the excess with code P (since it was taxed in the prior year), and one for the earnings with code 8 because earnings on excess are taxed in the year of distribution. To the IRS, the excess amount on the 2017 W-2 and the 2018 1099-R will resolve the issue.

I believe it is now a national initiative, with some regions being less "nice" than others. I recommend filing when you an "invitation" like this, especially if you used the online calculator.

I have seen both

What ETA said.

1) Yes, I have seen it a few times. Not an issue as long as that was what was agreed upon. I once saw one where (ex)husbands QDRO assigned 100% to the (ex) wife and vice versa. I found out years later from the client that they never separated after they got divorced, and she believed they were in financial trouble and QDROs were the only way they could access their respective retirement plans. 2) Is your involvement limited to drafting the DRO for the other attorney who will then submit it to the court? If that is the case, you are simply providing the product as requested. Request payment in advance and make sure that your concerns are duly noted.

$25,000 is reported as deferrals in Box 12 the W-2 The excess deferrals are NOT included as wages in Box 1 of the W-2 2017 Form 1099-R is issued for $1,050 with reporting code 8 (excess deferrals and earnings taxable in 2017) The participant is only taxed on the excess once because it is not included as wages on the W-2 but is included as income on the 1099-R. Tax software should pick this up.

I'm saying no, preemption does not exist so that you can ignore or disregard state law. Preemption exists because federal law is supreme, and conflicts with state law is resolved in favor of the federal law. ERISA also expressly prohibits state law from governing an employee benefit plan. A state law requiring specific coverage under an ERISA health plan is preempted because it sought to govern an employee benefit plan. The issue in our thread is not as clear-cut. There is no ERISA requirement that the loan has to be repaid via payroll deduction. A state law prohibiting an employer from disregarding an employee direction to stop withholding from their pay governs payroll (or possibly employee rights), it does not govern employee benefit plans. Is it possible that a court could apply general or express preemption so broad that it would preempt a state payroll law that does is not in conflict with an ERISA requirement? Sure, it is possible. But absent that, I would not advise a client to disregard state law because of the general principle of preemption.

No.

It adds complexity for sure, but in my opinion, as long as you are competent and capable that is no reason to "not want anything to do with adding a 401(k) plan". Of course there are also times when clients (or the client's CPA/adviser) want to add a plan or plan feature that just does not make sense...

I don't know of any state where you can force an employee to deduct the loan payment from wages if they tell you to stop. If you are going to do it, make sure you have a written opinion from an attorney who is specializes in labor law in your state. Honoring the employees request will not result an operational failure for the plan (only a loan default for the EE), why risk a violation of state labor law just to enforce an administrative option of the plan that is not required by ERISA?

It is very doubtful that it is not specified in the document. That doesn't mean that it will be as simple as "the measuring year for break in service is X". It might refer to something that refers to something else that is dependent on an election in the adoption agreement.

Yep, they are fine.

No. In fact, the IRS notice probably even tells them that they can do DFVCP. Is it a CP 403 or CP 406 notice?

It is clearly not preempted by ERISA since ERISA does not require repayment by payroll deduction. I struggle to justify why an agreement made between employee and employer should carry more weight than state law. To prohibit what choice? Payroll deduction altogether? I guess they could amend the plan to say you can't stop your payroll deductions, but since they can't actually prohibit the participant from doing it, all it would do is create an operational failure for the plan...

Well, that isn't quite how preemption works. Think of it more like if ERISA requires something to be done, it would most likely preempt a state law to the contrary. But every provision in a plan document is not an ERISA requirement. Loans have to be repaid, but ERISA does not require that the loan be repaid by payroll deduction. Drafting a plan document requiring that the loan be repaid by payroll deduction does not preempt state labor law, it just means that it is the only option provided to the participant to repay the loan, and that the participant will default on the loan if payroll deduction is stopped.

Very interesting. I'm not sure what makes a "former employee" eligible for an employer sponsored plan but obviously it can be done. I'm assuming it would need to be a balance in excess of the force-out limit or the plan would have to roll it right back out

So at a birdseye view, it looks like the senate version had pass through at 25% but excludes companies providing professional service. That excludes most of my pass through clients from the QP/pass through dilemma.

I could see where a former employee who is still a participant could be able to roll in, but a former employee who is no longer a participant?

I don't think this referred to the hardship rules per se. Rather, there has been some informal guidance (at least I haven't seen actual guidance address it) in Q&As regarding timing issues and hardships. One such question has been what happens when a hardship is granted based on certain circumstances and those circumstances change. The classic example is a hardship for the purchase of a home and then the purchase falls through for whatever reason. Some people questioned whether the change in circumstances requires repayment of the hardship distribution because the hardship no longer exists. The IRS response has been that the plan could not accept repayment of a hardship even if it wanted to, because the hardship was valid at the time of distribution and there simply are no procedures that would allow the money to return to the plan. If we look at the present question using the same logic, what rule or procedure would allow a plan to accept assets from a person who is neither employee nor participant (assuming the distribution was proper when implemented. Even if there was an incentive to take the assets back, I don't see how it would be permissible. Like you said, that should be the end of the story. But what happens if the recipient of the rollover refuses to accept the assets and the distribution goes "stale"? Is the participants account restored? Any RKs want to chime in?

Could that be paychex perhaps?

I have most of my files in pdf format, and I won't charge for a simple email with attachments. My service agreement is set up to only charge for services actually performed, so the only fees upon termination of services would be for services performed but not yet billed and any services necessary for the transfer to the other TPA.