Larry Starr

Not usually. Read this: Payroll Practice Exception The “payroll practice” exception from ERISA coverage is the most relevant exemption for employer-paid sick or family leave plans. Most often, sick, vacation, and other paid-time-off (PTO) compensation is disbursed from an employer’s general assets. Spared from the definition of an “employee welfare benefit plan” is the “payment of an employee’s normal compensation, out of the employer’s general assets, on account of periods of time during which the employee is physically or mentally unable to perform his or her duties, or is otherwise absent for medical reasons (such as pregnancy, a physical examination, or psychiatric treatment).” 26 C.F.R. § 2510.3-1(b)(2)

More direct: No. It's not a FRINGE. It's actual PAY. This might help (and here's the link to IRS Pub 15-B): https://www.irs.gov/pub/irs-pdf/p15b.pdf Understanding Fringe Benefits Common fringe benefits include health insurance, life insurance, tuition assistance, childcare reimbursement, cafeteria subsidies, below-market loans, employee discounts, employee stock options, and personal use of a company-owned vehicle. [Important: The companies that compete for the best talent in highly competitive fields may offer the most extraordinary fringe benefits.] Uncommon fringe benefits may fit the company profile. PetSmart And Dogtopia both operate pet-friendly workplaces. Ben&Jerry's rewards its workers with free ice cream. Patagonia's headquarters features extensive volleyball courts and yoga classes. The companies that compete for the best talent in highly competitive fields may offer the most extraordinary fringe benefits. Alphabet, the parent company of Google, is known for benefits that include free commuter bus service and a free gourmet cafeteria. Microsoft gives 20 weeks of paid time off to new birth mothers and 12 weeks for other new parents. Special Considerations By default, fringe benefits are taxable unless they are specifically exempted. Recipients of taxable fringe benefits are required to include the fair market value of the benefit in their taxable income for the year. The Internal Revenue Service (IRS) maintains a list called the Tax Guide to Fringe Benefits. As of 2019, the list of fringe benefits excluded from income taxes includes: Accident and health benefits Achievement awards Adoption assistance Athletic facilities Commuting benefits De minimis (minimal) benefits Dependent care assistance Educational assistance Employee discounts Employee stock options Employer-provided cell phones Group-term life insurance coverage Health savings accounts (HSA) Lodgings on business premises Meals No-additional-cost services Retirement planning services Tuition reduction Working conditions benefits All of these exemptions are subject to certain conditions, many of them complex. For example, achievement awards are only exempt up to a value of $1,600 for qualified plan awards and a value of $400 for non-qualified plan awards. Qualified plan awards are open to all employees, not just highly-paid employees. Other exemptions are not available to highly compensated employees if the benefits are given to them but not rank-and-file employees. These include employee discounts, adoption assistance, and dependent care assistance. Most but not all fringe benefits that are income tax-exempt are also exempt from Social Security, Medicare, and federal unemployment taxes. Adoption assistance is exempt from income tax only. Valuing Fringe Benefits Any fringe benefit not named above, or any of the benefits named above which does not conform to IRS rules for exemption, is taxable. Those rules are complex too. For example, working condition benefits are taxable to the extent that they are for personal use. For example, if an employee is given a laptop, the taxable income would be the percentage of the laptop's fair market value that is devoted to personal use. If 80% of its use is personal, the taxable income is 80% of the value of the computer. In general, fringe benefits are valued at fair market value. This is the amount the employee would pay for the same benefit at retail. (For related reading, see "What are Some Examples of Common Fringe Benefits?")

I don't understand your question. Regardless of which corona virus TEST is used, they are all determining whether it is COVID-19. They might be developing their own tests; they aren't developing a different disease! And the are ALL being approved by CDC as far as I can tell.

I disagree, but admit someday we might get a ruling otherwise. If an employee does not have payroll, I think it is a violation of your loan policy to make a loan KNOWING that there is no ability to comply with the procedure. We just dealt with this (of course, the legislation is still just a bill, not a law). And a couple of things that no one has mentioned. First, this only applies to loans made in the first 180 days following the enactment of the law. Second, it only applies to qualified individuals, not all loans: What's a qualified individual? (ii) to an individual— (I) who is diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention, (II) whose spouse or dependent (as defined in section 152 of the Internal Revenue Code of 1986) is diagnosed with such virus or disease by such a test, or (III) who experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary's delegate). I think if you want to make a loan to an individual who fits the description but has no payroll, you need to amend your loan policies to account for someone who has no payroll but meets this definition. Again, we might get more guidance someday.......

Generally, no. That doesn't mean it doesn't happen: "Oops! The office manager put the wrong account on the deposit slip so we are just correcting the administrative error". I've seen this a number of times; the argument is that the money is NOT coming back to the employer in any way and is still being used and deducted in the same year. Is it right? Maybe, or maybe not. But I guarantee is it done and I've NEVER seen any repurcussions.

It will become fixed when the PA says it is fixed, which will be the date of the interim valuation. No other reading makes sense. You cannot win this fight, and it will cost the client a fortune to fight it in court and then lose.

I have no doubt that it has to be, otherwise it cannot be correct. I don't remember seeing it mentioned in the FAQs that came out yesterday (I admit I don't have time to look right now), but I'm happy to take any bet for any amount that it will be extended!

No. It's the balance when you make the actual loan. And that balance is tied to the definition of valuation date. So it may be that, if it is not a daily val plan, an interim valuation may be appropriate. Just another reason why we have very few plans that allow loans!

Of course we will be looking for guidance, but paid leave will show as compensation on the W-2 and if that's the definition used for plan purposes (without any modifications), then the leave counts. Also, be aware that hours will also probably count during the leave since the definition of hours includes hours for which you are paid or entitled to payment, but it is also customarily limited to no more than 500 hours for any period of time when no services are paid. Document language will almost definitely spell out those provisions.

I can't say I necessarily understand anything you are saying about your in house developed software; no one I know in our business uses anything other than commercially provided software. In our case, we use Relius Government Forms because we use the Relius software for administration and it only makes sense to use their 5500 software as well. You might want to check with them. There are quite a few who use FT Williams, which might be an alternative for you. As a start, I would suggest you discuss your needs with their respective sales departments to see if what they do fits your needs.

As noted, the spouse is ENTITLED to the benefit; period. She needs to make the claim to the plan. It is the plan that needs to figure out how to get the money back. They are the ones who may need to hire the lawyer first, but if she can't get satisfaction from the plan, then she needs her own lawyer. They may conceivably have to go to court to get the son ordered to pay the money back. As to Fidelity's role, as noted elsewhere, it has to be determined who screwed up. I would expect it was NOT Fidelity; I would expect they were told to make the distribution and it was approved by a plan administrator. If Fidelity was the plan administrator OR did this without instruction, they will need to fix it and it might take a court to order them to do so, but the key is to get the party who screwed up to acknowledge that it's their fault and work on fixing it from there. The spouse may very well have to hire an attorney, but the above process should be tried first. You might be surprised as to the results.

Reread my answer and you will find this: So IF the plan is TH and a Key gets an allocation, they will be required to make sure they meet the TH minimums. As too often is the case, when people write they do not provide enough info. The original question not does say this is a plan that meets the rules to avoid TH (meaning no employer PS contribution). A plan that is designed to not have to meet TH rules is a plan that is EXEMPT from TH, not one that MEETS TH rules. FWIW.

Umm..... a safe harbor match does not meet the top heavy rules in the first place. So IF the plan is TH and a Key gets an allocation, they will be required to make sure they meet the TH minimums. Seems like the suspension of the 2020 SH match is not at issue for that question. Am I missing something?

Can you spell COOPERATION? Sure you can! ?

Makes sense..... good luck.

Peter, I don't think your answer to your own question is correct! Aren't you looking for a list of QTAs that would be willing to accept the responsibility? That link is to search for plans that are being handled by a QTA, or whether a specific plan is being handled by a QTA. Isn't that a different thing?

What do you want the amendment to do? I think that matters a whole lot.

The Senate bill (which has not been acted on by the Senate yet) was not available to anyone as of this morning. They agreed on the items but were still crafting the language today.

Not aware of any, but I have had a couple of conversations with clients who have brought up force majeure issues on other business issues (like paying rent to the mall when the mall has been closed by the local government). I assume this question is somehow related to the corona virus issue?

Yes, option 1 is the correct response.

Yes, that is my conclusion as well.

I think the TPA is absolutely wrong; the paperwork should be forwarded. The Plan Administrator is in charge; not the TPA. A discussion should be had between the TPA and the PA explaining all the info above, but it is up to the PA to decide how to handle this. I think the recommendation to NOT do the rollover because of the pending divorce is correct, but it is the PA's decision to make, not the TPA.

100% agreed.

Assuming the return was due 4/15 (Sole Prop or C Corp) and not 3/15 (Partnership or S Corp), then his due date is 7/15 and he has until that time to make the contribution. There has always been some controversy regarding if you can get an extension (which would be until 10/15) if you actually file the return prior to the first regular due date, but many people take the position that you can. I prefer to tell clients who want to file by the first regular due date to go on extension and file the return the day after the regular due date; that guarantees that your extended contribution date is valid.

The first $10k is part of the 2019 allocation; which means that now $20k is carried forward as 415 suspense account into 2020.