metsfan026

She was not a US citizen, she was working remotely while living outside the US. She has since moved to the US, and is now a W2 employee.

They were paid by the company, but they weren't W2 nor were they given a 1099 due to living outside the US. They were paid by the company, though. Does the citizenship matter in terms of eligibility into the Plan?

Perfect, so nothing is needed. I appreciate it!

We have a client that has had someone working abroad for them for a number of years. Technically they haven't been on payroll, since they were living outside the U.S. They have now moved to the U.S. and are working as a normal W2 employee. The question is, what do we need to put in the Plan Document to allow this person to participate in the Plan immediately? Do we have to amend the Plan to say that participants working remotely gain immediate entry into the Plan (while other employees have to wait the typical 1 year)? The issue is that compensation is defined as W2 salary, so technically they haven't been included in the Plan. Thanks for your help!

I thought I remember reading that the Mega Backdoor Roth contributions had to be made early in the year (I think it was 30 days after the close of the year). I just wanted to double-check to see if that is accurate? We have a client asking about it, so before I confirmed that they could start it for 2025 (and not 2024) I just wanted to be sure. Thanks in advance!

This is the right one, correct? DFVC Penalty Calculator It's a plan we're taking over, where the prior TPA failed to file the '23 Form 5500. That's all we need to do though, right? File the form marked as DFVC and then have them make the payment using this calculator?

I just wanted to make sure I wasn't missing a step to file a DFVC filing for a new client: 1) File the Form 5500-SF on EFast, with it checked off that it's a DFVC filing 2) Make the payment using the calculator That's all there is to it, correct? There isn't a step I'm missing? Just wanted to make sure. Thanks in advance everyone!

Just curious how people handle this, because I've had it multiple times where I client inadvertently doesn't give us a Termination Date on the Plan Census. So this leads to the participant count being incorrect (for instance, someone terminated in '23 but we weren't notified so they were included in the Active Count). Do you: 1) File an amended '23 form, to correct it? 2) Just file the correct count for '24 and ignore the '23 issue? 3) Carry the mistake forward for consistency, but have the Year End numbers correct for '24? Obviously the easy thing is to just amend the '23 form and move forward accurately, but I was just curious how everyone handles this. Thanks!

Thanks everyone! I'll file them, but I just wanted to be sure that the electronic filing of the 5558 is now acceptable for the '24 Plan Year as well?

I vaguely remember reading that you no longer needed to file a Form 5558 and that the extension was automatic. Am I mis-remembering something? Or is it that they can now be filed electronically for the 2024 Plan Year, as opposed to sending the paper filing? With the deadline on July 31, I wanted to make sure I wasn't just imagining something. Thanks in advance!

Thanks! So basically the Plan should make a contribution into the QNEC, but does the contribution also include the lost Safe Harbor Match they would've earned?

We have a client with a participant who wanted to start contributing Roth contributions at the beginning of the year, but there was a payroll error and they never started. Now the participant is asking how they can make up the missed contributions, since they are looking to make sure they get the Safe Harbor Match. The question is, how can the participant makeup any missed contributions? They are asking if they can fund them themselves and send a check. I didn't think this was possible, and that it should have to be done through payroll (even though it's Roth). I just wanted to make sure that I wasn't missing something. Thanks in advance!

Good morning everyone, thanks in advance for the help. We have a client that is looking to acquire another practice. As part of the agreement, the group being acquired wants them to provide a matching contribution for the first year. This is a non-Safe Harbor Plan, but does allow for a discretionary matching contribution. There are no Highly-Compensated Employees included in the group being acquired. No matching contribution is being made to the group as a whole. Since there is no match and no HCE, I don't see an issue from a testing standpoint as the HCE would be 0%. So would I be right to say that there is no issue with giving this small group a discretionary match as long as there remains no matching to the rest of the company as a whole?

Question on how to handle a minor issue. We have a client who inadvertently deposited a 2025 contribution on 12/30/24 so it's showing up on the 2024 Asset statement. When filing the Form 5500 would you: 1) Show it as a liability to remove it from the assets 2) Just remove it from the assets and act like it was deposited on January 1 It's not a significant amount, just curious how others have handled it in the past. Thanks in advance!

So if it says it's discretionary, they are allowed to give to the son and not the parents?

We have a client that made the Safe Harbor Match to all of the Non-Highly Compensated employees. When it comes to the HCE there are three, the owner, his wife and their son. Obviously there's no such thing as discrimination to a Highly Compensated Employee and they don't have to make the Safe Harbor Match to themselves. I assume there is no issue, then, if they want to provide the Safe Harbor Match to their son, but not themselves? I don't see an issue, I just want to make sure I'm not overlooking anything. Thanks!

I got a question from a client in regards to how they should be counting hours for a Plan Year. Is it the actual hours worked from 1/1 - 12/31 for that Plan Year? Or should it be based on the hours for the times that match the W2 (for instance, the first payroll on the W2 is all hours worked in the prior year but the pay date carries into January)? Hopefully that makes sense. Thanks in advance!

I've just never come across this. If a participant works over 1,000 hours during the Plan Year but is on FMLA at the end of the year, does that still qualify them as being employed as of the last day of the Plan Year and therefore eligible for a Profit Sharing Contribution? My gut is the answer is yes, I just wanted to confirm. Thanks!

Is there a company that everyone uses to help locate terminated participants who we can't locate? The company we used to use seems to no longer be operating, so we needed a new one. Thanks in advance!

I have a client that has not yet adopted the self-certification for Hardship Distributions. I have a situation where it doesn't distinctly fall under a Hardship per the IRS Safe Harbors, but it's obvious there is a financial need. The participant needs to move to a new rental with their parents, who are terminally ill. So it's not the purchase of a primary residence and it's not for the medical bills, but they are moving/renting in order to get treatment and care for them. Is this a situation where we can still approve the Hardship?

They are purchasing another employer and looking to give service credit for their prior time

We have it in there yes, but wouldn't doing it for a few and not everyone cause different testing issues? Maybe I'm overthinking it.

Sorry for all of the questions lately. We have a client who does a flat 4% Safe Harbor Match who is looking to bring in a new group of employees. For this new group they want to give them the same 4% match long-term, but for the first year they want to give them a 7% match. Is that something that we can even do, if it passes the necessary ACP testing? Or is it not even possible to do since the match is a Safe Harbor? I guess can we give only certain employees a 3% discretionary match but not everyone (assuming it passes the necessary testing)?

Thanks everyone, I really appreciate it. We've been talking to the prospective client about what they are currently doing and how we'd move forward. Basically, if they wanted to limit the exposure they can do the 3% Safe Harbor with a discretionary match (66% of the first 6% deferred) as a way to push extra money to the owner (since the ages/service make a Profit Sharing hard to structure).

So basically if it was a fixed match it's OK, but as a discretionary match it would fail the formula. It can be done, but up to a maximum of 4% of comp. And yes, the Plan does have a small eligibility with only the owner deferring. So if we did go with the Triple Stack Match, would there be an issue with only the owner deferring if it was documented that no one else opted to participate?