Mikerbpm

I had this question posed to me the other day. For the new tax credits for 2023, can we start a new plan even though we already have a 401(k) plan. Freeze the existing plan and merge into the new plan but yet take advantage of the new credits including the $1,000 credit for matching. This is a small 6 person plan.

Paychex does not offer 403(b) plans so no wonder they offer no other solutions.

401(k) Plan has failed the ADP test for 2015, 2016, 2017 and 2018. Refunds were processed each year, but after the March 15th deadline each year. They are not an EACA plan so we can't use the June 30 deadline either. The amounts are insignificant in terms of the total contributions. They failed to file a form 5330 each year to pay the excise tax. What is the right fix here? The plan is to file a form 5330 for each year realizing they are late and that penalties and interest will apply What about the "stacking" of the penalty on the 5330. For example, say they returned $25k for 2015. The 10% penalty would be $2,500.00. The instructions under the prohibited transaction rules say "If the prohibited transaction is not corrected within the taxable period, an additional tax equal to 100% of the amount involved will be imposed under section 4975(b)" The instructions only have that bolded section under the prohibited transaction rules, not the Section H portion about ADP test refunds. I am hoping it isn't $2,500 for 2015, then $25k each year they didn't file.