Steamboat

It is my understanding if a specified employee's deferred compensation is subject to a 6 month delay, income tax is due at the end of the 6 months when the deferred compensation is paid. Is this correct? I have an employee saying otherwise.

A participant makes a subsequent deferral election. Before the 12-month period before it will be effective elapses, can she void that subsequent deferral election and make a different subsequent deferral election or is she locked in until the 12 months expire?

Thank you! No other issues. The payments continue to be paid to her spouse beneficiary so it's only the tax reporting that is off. The spouse should be getting 1099s to report the benefit.

A former employee had been receiving annual payments from her NQDC plan, and we were issuing her W-2s. We just learned the former employee died a couple years ago. The spouse has continued to cash her checks. How do we correct the tax reporting from W-2 to the deceased former employee to 1099-MISC to her spouse?

Does an auto-escalate notice have to be provided 30 days in advance? Thanks in advance.

Participant elected 75% J&S and started receiving pension benefit. Then she and her spouse divorce. Divorce decree says the ex-spouse is not entitled to any pension benefit the participant may have. Despite divorce decree, isn't ex-spouse still entitled to the benefit if the participant dies before the ex-spouse?

An individual claims he's due a pension benefit from company A. Company A was acquired by company B and then we acquired company B. The plan was terminated before we purchased company B and we don't have any pension plan records. What obligations do we have to the individual? Thanks in advance!

Seller is a sub. of holding company. Holding company sponsors the health plan that seller's employees participate in. Purchaser buys seller from holding company and merges seller into purchaser. My thought is tat seller employees, who are merged into purchaser post-close, receive 2 1095s: 1 from holding company that sponsored health plan pre-merger and 1 from purchaser? Does this sound correct? Thank you so much in advance!

thanks for your reply. The participating employer is very, very small as compared to the plan sponsor. It doesn't seem that a stock sale would qualify as a termination in this case.

A participating employer in a 401(k) plan is being sold via a stock sale (will no longer be in the controlled group). Employer contributions in the 401(k) are subject to a vesting schedule. Will the employees of the participating employer who participate in the 401(k) plan end up forfeiting non-vested amounts? There won't be any partial plan termination. Thanks in advance!

Does a grace period affect the amount that can be contributed to a HFSA in a year and still not be taxable? For example: 2020 HFSA election: $2750 In 2020, you incurred and are reimbursed for $2700 in expenses, so $50 is available for expenses that can be incurred during the grace period in 2021 and reimbursed and not forfeited. 2021 HFSA election: $2750 In 2021, you incur and are reimbursed for $2800 in expenses ($50 from 2020 that was used up during the grace period and $2750 from the 2021 election that was used up during 2021). Does this mean the $50 is taxable to the employee in 2021 since it exceeds the $2750 annual limit? I understand this is how it works when the dependent care spending account annual limit ($5000 - I'm ignoring the recent increase for this example) is exceeded but not sure about a HFSA. (I also know a HFSA carryover is different and the carryover and annual limit are combined and not taxable to the employee.) Thanks in advance!

A participant defers a portion of his salary in January until termination, and each month the deferral account is credited with 4% interest. When FICA tax is paid at the end of the year (using the rule of convenience), does the amount subject to FICA include the original amount of salary deferred plus the interest accrued throughout the year, or is the amount subject to FICA only the original amount of salary deferred?

Perfect. Thanks!

Given the DOL/IRS May 2020 guidance (85 FR 26351) extending the time under ERISA/IRC a participant can file an appeal under a retirement plan during the COVID-19 emergency, by what date does a participant have to file an appeal? Just say 60 days after announced end of COVID-19 emergency?

We want to time auto-escalate at the same time as annual salary increase to help/encourage employees to increase 401(k) plan contributions up to our 6% match. Is that okay to do mid-year? June 1 is the salary increase date.