KdGal

C-Corporation due date was not extended. The extension to May 17th only applies to individual taxpayers (including Schedule C sole proprietors). It also extends the date to make IRA contributions for individual taxpayers to May 17th as well.

Thank you! It just feels like it's not a good choice and I want to encourage the employer to see the SH Match and the Bonus as two separate benefits and not link them together. This may help me convince them. Thanks for your insight!

An employer wants to pay end of year bonuses to employees based on a percentage of revenue they brought in to the company. This company also has a 401(k) plan with a dollar for dollar safe harbor match up to 4% of compensation. The owner wants to count the employer safe harbor match as part of the bonus. For example, employee Z is due an $8,000 bonus. Employee Z is also due a $2,400 safe harbor match based on his deferrals into the plan during the year. The employer says the bonus is $8,000 minus the $2,400 safe harbor match that will be made on behalf of employee Z = $5,600 remaining bonus to be paid in cash to employee Z. So, employees that get a bonus and do not defer into the plan get their full bonus in cash. Is this allowed, legally? If it is not allowed, can anyone provide a reference to a statute or something so we can explain to the owner why this is not allowed? Thank you!

Thank you @Brian Gilmore! This is very helpful information and I appreciate it.

I have a client that offers group health insurance to its employees. The employer contributes up to $500 per month toward the cost of the benefit for each eligible employee. One employee does not enroll in the group health plan because he is covered by his wife's group health plan through her employer. The employer has decided they want to pay this employee the $500 benefit that he is "missing out on." The employee and employer insist that this should be considered a non-taxable health insurance reimbursement. Their argument is that all the other employees receive the $500 employer paid benefit non-taxable. From everything I have read, that is wrong and it is considered cash in lieu and is taxable to the employee on his W-2. Can anyone provide me with an authoritative source (IRS Notice, etc.) that addresses this and states that is should be taxable income to the employee (assuming I am correct)? Thanks in advance!

Thank you for your reply! I knew it should be a code 4 in the year she originally rolled over the funds into the inherited IRA. I wasn't sure if it would continue to be a code 4 if she took distributions from the inherited IRA in future years as well. Thanks!

My client received a 1099R for a distribution taken during 2019 from an Inherited IRA account. My client was the non-spouse beneficiary of this IRA and inherited it several years ago. The funds are held in an inherited IRA. My client is over age 59 1/2 (actually 61 yrs old). The 1099R is coded with a "1" in box 7. That seems wrong to me. If she is over 59 1/2, shouldn't it be a code "7" normal distribution so that the 10% early w/d penalty doesn't apply? Any guidance or advice is much appreciated. Thank you.