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Have an employee who in 2021 & 2022 made contributions to the plan but he is an excluded employee. How would you correct, just refund 100% of his contributions and forfeit the match. Would the distribution be considered 2022 income since it will take place in 2022. What about his 2021 W2 that shows his employee 401k contribution. Does he just file as is? Thanks

Hello, I have an HCE who mid year started to make employee contributions. The documents states HCE's can not participate. I know I need to refund them their contributions, my question is we are refunding the 2019 contribution in 2020, do we treat this like a 402g refund and the 2019 contribution would be taxable in 2019 and earning in 2020, or is everything taxable in year of distribution, 2020

yes plan year is calendar year, thanks Can you base vesting on the anniversary date?

Plan has 3 year cliff vesting Employee A Hire 4/28/16 Term 4/26/19 two days shy of 3 years but did work 1000 hours in 2016, 2017, & 2018. I say they get credited for 3 years. From document: 1.109 "Year of Service" means the computation period of twelve (12) consecutive months, herein set forth, and during which an Employee has at least 1,000 Hours of Service. However, the Employer may amend the Plan to provide a lesser number of Hours of Service in a Plan amendment for eligibility purposes, vesting purposes, or accrual purposes without adversely affecting the Plan's reliance on the IRS advisory letter. For purposes of eligibility for participation, the initial computation period shall begin with the date on which the Employee first performs an Hour of Service. The participation computation period shall shift to the Plan Year which includes the anniversary of the date on which the Employee first performed an Hour of Service. If there is a shift to the Plan Year, then an Employee who is credited with the required Hours of Service in both the initial computation period and the Plan Year which includes the anniversary of the date on which the Employee first performed an Hour of Service, shall be credited with two (2) Years of Service for purposes of eligibility to participate. A Year of Service for eligibility purposes is not credited until the end of a participation computation period. For vesting purposes, the computation periods shall be the Plan Year, including periods prior to the Effective Date of the Plan. The computation period shall be the Plan Year if not otherwise set forth herein. Notwithstanding the foregoing, for any short Plan Year, the determination of whether an Employee has completed a Year of Service shall be made in accordance with Department of Labor regulation §2530.203-2(c). However, in determining whether an Employee has completed a Year of Service for benefit accrual purposes in the short Plan Year, the number of the Hours of Service required shall be proportionately reduced based on the number of full months in the short Plan Year.

Hello, If an employee goes over the 402g limit for the year and the correction is made in the current year, what would the 1099r look like. For example. John contributes $19500 for 2018. We correct this in December 2018 but because of loses the refund is only $900(1000(amount over) - 100(loses) When he gets his 1099r in Jan 2019 will it be an issue if it says $900. When doing his taxes he will enter $19500 for his 401k contribution and enter $900 for the 1099r. Will the IRS still he went over $100?

Yes is states,, if as a part-time, temporary or seasonal employee, you complete one (1) Year of Service as defined below, you will at that point no longer be treated as a part-time, temporary or seasonal employee So this ex full time employee who has worked more than 1000 hours in the past can not ever be excluded? Once you are in you are in? Can't exclude now because he worked less than 1000 hours per year?

If any employee has meet the eligible requirement(21/ 1 year/semi) and is now considered eligible, to date they have not contributed. This employee is now no longer working full time and is becoming a part time employee. Can we now exclude them. The documents says we can exclude"part-time, temporary or seasonal employees, i.e., employees whose regularly scheduled service is less than 1,000 Hours of Service during each 12-month eligibility computation period" I'm leaning towards once they are in you can not exclude someone Thanks

A plan is a DB/DC combo plan. Do they both have to have the same NRA? Right now the DB has 62 and the DC has 65.

A document is written: Normally a plan with 1 year of service and 21 is written: You will be eligible to participate for purposes of salary deferrals when you have completed one (1) Year of Service and have attained age 21. But for some reason recently it was written as: You will be eligible to participate for purposes of salary deferrals when you have completed 1,000 Hours of Service within your first 12 month(s) of employment and have attained age 21. The client is coming back to us saying he thought the eligible was 6 month, based on the above. I can see his point. You could interpret it as once I work 1000 hours(6 months for full time employee) I become eligible. Doing this for years I know it's 1 year but could see his arguement. Has anyone else seen it written this way?

The owner of the company in a non-resident and has a E-1 visa. Can he serve as trustee. Doing research it looks like he can but you have to have a second trustee that is a US citizen. Is that correct.

Hello, I plan fails ADP test, instead of doing refunds they decided to make a QNEC. My question is when calculating the QNEC can I also re-characterize some of the HCE's contribution as catch up. For example if one HCE,over 50, has $5000 in contributions can I re-characterize this as catch up too bring the HCE avg ADP down and use that # to calculate the QNEC, or do I have to use the HCE ADP avg with all contributions under $18k Thanks,

There is a EE who was a non-union EE, he is now a union EE. The plan excludes unions EE. Can this EE take his money of of the plan now because he is no longer eligible/excluded?