Jakyasar

Thank you for pointing out the glossary section. How about the other points like deductibility etc.

Agreed on the non extension. I still want to do it because I have no idea what future adjustments IRS will come up with once all Covid19 issues go away. Old school approach.

As a follow up, is there a de minimus amount of interest? I used the calculator based on above assumptions and got 23 cents of interest. How to tell a client to make the 23 cents of deposit. Thank you

Apologies for the 100 level questions as my first time doing this. Client made the 2019 deferral deposits pretty much 15-30 days after the payroll dates. Assuming 7th business day as the safe harbor deposit date. Document is silent on when the deposits need to be made. This seems to be the standard. I am aware of the "as soon as feasible" clause which varies from employer to employer. My understanding from the VFCP section 5(b) and the questions based on the "online calculator" page Principal amount is the per payroll deduction e.g. 3/1/19 for $200 Loss date is the 7th business date from payroll date 3/11/19 (included 3/1 as the first business date) Recovery date is the date of the deposit 3/18/19 i.e. 6th business days from loss date Final payment date - assuming the same as Recovery date - I could not find anything on this as a definition. Questions: Are the dates correct as calculated above? The interest added by the employer to make up the missed dates, are they deductible. If yes which year (assume 2019 tax return not yet done) As this additional interest correction added to the assets, for which plan year's 5500 filing should reflect them? Assume 2019 5500 filing is not yet completed. What if during 2019 assets had a negative return or 25% return, does it matter how the assets perfomed? Any comments/suggestions are appreciated. Thank you,

Thank you both for your comments/insights, never a dull moment. Be safe and have a great weekend.

Hi Client files the LLC (single member - schedule c) tax return on 4/15 with no extension but the actual return was extended to 7/15/2020. I just got the info and found out that additional contributions will be required for 2019. As the filing was extended to 7/15/2020 with no extension filing requirements, I believe the client can make the additional contribution and deduct for 2019 i.e. redo the tax return. Thank you for your comments.

Hi all My apologies if this was discussed before. The normal 5500 filing was due by 4/30/2020 which was automatically extended to 7/15/2020 (if 5558 was filed, would have been the same deadline). What is the deadline to certify AFTAP 6/30/2020 or 7/15/2020? Have a great weekend and be safe.

Can you 11-g contributions for the terminated employees? I am assuming that the plan passes the ratio test under 410(b) but not necessarily ABPT? Failing ABPT usually may require that 401(a)(4) passes utilizing ratio groups. Have you tried accrued-to-date method as well? How about restructuring? Just thinking out loud with a fried brain myself.

Hi Looking at a takeover PS plan. The formula is cross-tested and has 3 groupings (no everyone in their own group option), each identified for a specific job category. Sponsor adopts a resolution each year on how to allocate the contribution. Sponsor hired a 4th category employee, became eligible for 2019 but does not fit in any of the categories. It is not an excluded class job category. How to allocate for this new job category, may be 11-g?? Thank you

Thank you for your responses. I miswrote when I said SH match, meant NESH, sorry for the confusion. It is very clear only NESH @ minimum 3%. So the corrected question I have is, what happens to the discretionary match contribution deposited to each person's account for the first 6 months? Just tested for ACP? And this would be in addition to the full year NESH, correct? Regards

Thank you for the response. Looks like only 3% non-elective can be added, is that correct? What happens with: "How will the plan satisfy SH for 2020 and is there any testing that needs to be done? How are the salaries considered for the first part of the year and second part of the year? Assume that the discretionary match is made at the time the deferrals. So for the first 6 months, they made the match which is way less than the actual SH match amount would have been."

I am sure this was discussed and it is a very basic question: My situation is reverse of what is going on, sponsor wants to add SH rather than eliminating it. Existing 401k plan with deferral and discretionary match options. they provide 10% of deferral as match. Plan consistently fails ADP for the past 3 years. Sponsor wants to proceed with a safe harbor match, let's say effective 7/1/2020, standard 3% of the first 100% plus 50%..... How will the plan satisfy SH for 2020 and is there any testing that needs to be done? How are the salaries considered for the first part of the year and second part of the year? Assume that the discretionary match is made at the time the deferrals. So for the first 6 months, they made the match which is way less than the actual SH match amount would have been. Thank you

Fantastic and really appreciate your time and explanation. To Mike as well.

Mike, agree with you but not trusting the balances necessarily for acc-to-date. Will think about the restructuring. No OE option. It a 3 participant plan 2 HCE and 1 NHCE. C.B. Zeller, is the following the language you are talking about? It is from the DC plan. As I am combining both plans and the gateway is based on combined plan requirements, would I still be able to SCP for 2018? Thank you both for your comments. 3.10 Minimum Allocation Gateway. If the Employer elects to satisfy the non‐discrimination rules with respect to contributions or benefits by providing the minimum allocation gateway, each NHCE who (1) is a Participant in this Plan, (2) receives an allocation of Non‐Elective Contributions and/or QNECs, and (3) is not an Otherwise Excludable Participant must have an allocation rate not less than the lesser of 5% or one‐third of the allocation rate of the HCE with the highest allocation rate. An allocation rate is the amount of contribution allocated to an Employee for a year, expressed as a percentage of Compensation. If the requirements of Regulation §1.401(a)(4)‐9 apply to the Plan, the gateway will be determined in accordance with Regulation §1.401(a)(4)‐ 9(b)(2)(v)(D). Compensation under this paragraph will be limited to amounts a Participant received on or after his entry date with respect to the Non‐Safe Harbor Non‐Elective Contribution Component of the Plan.

Much appreciated and thank you

Ok, no self correction, how is it corrected then, VCP? Any other way? Thank you

Hi all Taking over a combo plan for 2019. Received information on 2018 so that I can check the 2018 test and based on my calculations, does not pass. I have questioned this and waiting for an explanation. However, if there is a failure on 401a4, is this a self correction and if it is where can I find it? May be late in the day, just cannot find it. The failure is to provide the minimum gateway. It would have been thru additional profit sharing allocation as DB allocation is set. If the gateway was provided correctly, 401(a)(4) would have passed with no issues. Thank you

Hi all PS plan is utilized as a QRP and has both the QRP assets as well as PS assets. Let's say balance are 50/50. All assets are comingled and pooled so no individual accounts. Clients pays x amount annual fees from the plan assets. Can the fee be split 50/50 i.e. 50% deducted from the QRP balances and 50% deducted from the PS balances? Thank you

Correct a w-2 employee. W-2 box 1 is 2,200 and box 5 is 27,200, the full 25,000 already reflected as deferral for 2019 so no retroactive deferrals. For Lou S, do you agree with Mike Preston's analysis as well? Thank you both Be safe

Lou S. Following up on this as I was just informed of what they did without me knowing. This calculation always puzzles me: "$19,000 deferral + $6,800 psp = $25,800 < $27,200 100% of pay so you are OK for 415." Does that mean they can now add the 2019 catch up of $6,000 thus bringing the total to $31,800? If not correct, what is the maximum deposit they can have for 2019 between deferral, catchup and profit sharing? Thank you

Hi Is anyone aware if the IRS office in UT open and/or accepting/processing 5500-EZ's? I have a few clients who still file paper copies and I want to have them switch to electronic filings. I do not want the forms sit and not processed for months (hopefully will not be the case but...) Thank you

Thank you for reminding me.

For the DB/CB plans, I do not believe AFTAP certifications are extended, correct? If the 5500 was due 5/15, AFTAP date would be 4/30 but if the 5500 filing is extended to 7/15, I do not see AFTAP being extended to 6/30.

Just saw the notice 2020-23, relating to rev-proc 2018-58 #40. Am I correct to assume that the 4/15/2020 extended line for the 5500/PBGC filing has been extended to 7/15/2020? Thank you

No automatic extension for 5500 Series. ASPPA has requested, but no news yet. This is what I was told