cdavis25

Curious, how do you adjust the 1099R when one would be in the prior year for the IRR and the other 1099R would be in the current year when the ACP refund is processed? Do you process an amended 1099R for the prior year?

A controlled group each adopted a separate SIMPLE plan. Together the companies are over the 100 ee count. Does each employer/plan in the controlled group have to file a VCP separately and pay a separate user fee?

Can a plan amend their document during the plan year to exclude HCEs from PW? This is not a SH plan.

What if that plan document was a standardized prototype document and had a last day or 500 hours. Would you still be able to amend the Profit Sharing formula?

Yes, owner only 401(k) plan.

A participant wants to make an after-tax contribution to the plan and then, roll that out the next day to a Roth IRA. It would sit in a holding account and have no earnings for the one day. The 401(k) plan does allow after-tax contributions and Roth deferrals. The participant is over 59.5 and the plan allows in-service of after-tax money at any time. Assume the plan does not have a testing issue with ACP. I believe that is possible using a code G on the 1099R and none of it would be taxable b/c no earnings. Is this right? Seems too easy to go around the Roth IRA limits.

Hi Larry, I am just referring to after-tax contributions. I am not referring to Roth.

Is there a deadline for the sole prop to deposit his 2018 after tax contributions? He files schedule C on extension. Can the 2018 after tax contribution be made on 10/15/19 when he files his return? Assume, the 401(k) plan allows aftertax. No other employees. He is not over his 415 limit. Just looking at the timing of the deposit. I think rank and file participants would be ASAP and fall under the same umbrella as other employee contribution timing.

Mike, they pass 410(b) on the nonelective portion b/c everyone is getting the 3% SH giving them a benefit on nonelective. Now, the issue is failing 401a4 ratio % for the group. 6 of the NHCEs get SH and PS. 4 of them only get SH. This is testing on a contribution or allocation basis.

They are SH Tom, so no ADP test. Mike, are you saying this is more of a BRF issue to defer?

A client excludes bonus from compensation for deferral only. They include it for SH and PS. They use full 415 comp for 410(b) and 401(a)(4) testing and are passing. The 414(s) comp test is failing when excluding bonus from deferrals. Am I correct that really isn't an issue as long as they pass the general test on full 415 comp?

That is right...they still count. Component testing does not work. Also, it would not matter if the plan had the integrated formula fixed in the document. You loose the design base when the allocation requirements for last day or 1000 hours are applied to the PS part. That creates a nonuniform formula b/c the SH goes to all and triggers 401a4. Right?

Or, would component testing resolve this issue? Group 1 would be the 4 NHCE that get SH only. Group 2 would be the 6 NHCEs and 2 HCEs that get both SH and int PS. Both groups pass coverage by themselves and therefore, pass 401a4 on the design base SH? Would it matter if the plan was written as new comp each in their own group or fixed integration?

I know this is old, but we had a similar situation on a small plan. How about you give the 3% SHNEC to all. Then, integrate PS using 100% of the taxable wage base (the doc has each ppt in their own group). Coverage for 401a in the 410b test is 100% b/c everyone is getting 3% SH. The avg ben test is failing, since most of the NHCEs do not defer. Now, 6 out of 10 NHCE get the int PS. The other 4 do not b/c they did not meet the allocation requirement of last day or 1000 hours for PS. They are not excluded or term'd with under 500 hours. The two HCEs get the PS. So, they fail the rate group on a contribution basis at 60%. So, it is possible to fail 401a4 when doing this. Suppose the only difference was the PS formula was hard coded in the document for integration so that 401a4 was not required. Then, they would not have the same issue b/c the SH allows them to pass coverage right?

If a sponsor over deposits the Match for a HCE, do you count the total deposited in the ACP test or would you forfeit first? i.e. Match is 50% on 6%. The match should have been 8,250. Client deposited 10k. Would you test 10k or 8,250 in the ACP test?