Basically

So wife works out like this (assuming she is older than 50): 26,000 deferral + 8,900 ER for a total contribution of 34,900? And this is because the 6,500 catchup doesn't count towards the annual additions. And to get to this the husband forfeits a little ER contribution. And if I'm seeing this correctly, that enables them to defer an extra 6,500 Thanks for the lesson!

When calculating a maximum contribution, the total deferral + ER contribution a participant can receive can not exceed their W2 wages, correct? Case in point - Employee earns $28,400. Max 25% ER would be $7,100. Employee is older than 50 so could defer $26,000 Deferring the 402g limit would result in a $26,600 total contribution (19,500 + 7,100) Adding the catchup... will she be limited to $1,800? Which would get her total contribution up to $28,400? which is her W2 wages? In this case her husband is also an employee and earns $103,090. No problem maxing out there.

Doc says... Required Beginning Date for a Participant other than a More Than 5% Owner - "Later of age 70-1/2 or retirement" So she is good... no need for an RMD. Looking at the document, there is an option that could have been made when setting up the plan... "election of later of age 70-1/2 or retirement" . Is that to mean that what the doc says now shown above does not allow a participant to take an RMD until they retire? Even if they are old enough for an RMD? The "election of" option would be the most flexible option.

No relationship at all the the owner. Still employed and working. As I recall, that is the key.. "still employed". Right?

If a participant in a plan is not an owner, do they have to take an RMD? Wasn't that the way it was in the beginning? Only owners had to take an RMD, non-owners didn't have to take an RMD from a qualified plan? Thanks

No. Come to find out there is rollover money. She can take a dist from that pool, correct? she is 59-1/2

Has the window for a COVID distribution totally closed?

👍 Got cha'

Ohh.. ok. The plan has been liquidated, the 1 employee has been paid out so I will file now. Just to recap: If I file before 12/31/2021 I use the 2020 form 5500-EZ If I file in 2022 I would use the 2021 form 5500-EZ The year end on the form regardless of the form's year would be the day the plan was 100% liquidated, 11/24/2021 (I wouldn't put the year end 12/31/2021) Thanks to all for chiming in. My goal is to understand the proper/correct way to complete what I am sure to many are things that are ingrained. I'm a firm believer that it can't hurt to ask.

Thanks! I am of the mind to file it now before it slips through the cracks. Just for my own knowledge, I would use a 2020 form because the plan would be a short year ending before December 31, 2021?

So what I am gathering is that to do it right I would prepare a form 5500-EZ now using a 2020 form, make the PYE say 11/24 and file it. Sound right?

A client closed down her single member plan and it's final liquidation occurred on 11/23. The balance is $0. My next step is to prepare a final form 5500-EZ. Do I use the 2020 EZ? and change the year end to be 11/23/2021? Just want to do it correctly, cross the T's and dot the I's Thanks

I am reading that to return the IRA distribution that ALL of it must be returned. - If 200,000 is distributed and 40,000 withholding is paid, to return the distribution within 60 days all 200,000 must be returned . Am I mistaken? Can the 160,000 simply be returned reducing the the distribution to 40,000 which ACK points out would result in a possible IRS refund?

I will take a look, thank you!

Can anyone point me to a link that will outline the history of the IRS' 6 year restatement history? is there such a definitive list? When it started? Required and optional interim amendments, a chronological history? Thanks

Ahh... yes. Thank you C.B., that is what I was looking for. RMDs are part of the basic operation of a plan... something that must be done. I sometimes second guess my knowledge. Appreciate the help.

Pooled... which is why I am asking and which is why I have in the past just used the 9/30 year end balance. If they were segregated brokerage accounts using 12/31 would have been easy.

For a September 30 FYE plan, when calculating the RMD can/do you use the 9/30 balance or do you need to determine the 12/31 balance and calculate the distribution based on that year end balance? Thanks

Coincidentally, today a client that setup a straight 401(k) for the employees only now wishes to participate in the plan. According to Lou's post above, I can amend the plan now to be a 3% NEC safe harbor as long as I do it by November 30. Correct?

Ahh... Zeller posted just before I did.. so let me amend my post. - To go from PS to 401(k) you just need to give everyone 90 days. As always, Thanks for the help!

Looking for clarification.... I understand that a new 401(k) must be adopted by 10/1 to ensure that the participants have at least 3 months to make deferrals for that year. - A straight PS plan has until December 31, correct? - A single member business 401(k) has until December 31, correct? - A 401(k) can be adopted any day from 1/1 ~ 10/1... correct? What is the rule if the plan sponsor wants to convert a PS into a SH? is there a deadline for that?

Ok, so the IRS is addressing the document authors and the plan sponsors adopting their document. And the key phrase I see you wrote is "to make corrections to their documents" regarding 1/31/23 Thanks

In announcement 2020-07 there is this passage: Deadline for Employer Adoption of Pre-approved Defined Contribution Plans The end of the third six-year remedial amendment cycle for pre-approved defined contribution plans is January 31, 2023. An adopting employer whose defined contribution plan is eligible for the six-year remedial amendment cycle and who adopts, by July 31, 2022, a newly approved plan, will be considered to have adopted the plan within the third six-year remedial amendment cycle. so... Jan 31, 2023 or July 31, 2022? I don't get the need for 2 separate dates. If I have an existing plan and we need to restate the document to comply with Cycle 3 it says above "The end of the third six-year remedial amendment cycle for pre-approved defined contribution plans is January 31, 2023" which I am taking to say you need to restate by 1/31/23. Or do I need to have them restated by July 31, 2022? What is the IRS is trying to convey? What am I missing?

I listened to that webinar mentioned above, very interesting. The speaker was easy to listen to and it was clear she knew her subject. After listening to the webinar I don't think I would venture into accepting 3(16) responsibilities. She talked about putting your 3(16) responsibilities in your service agreement and ways people try to insulate them self from 3(16) liability. At one point the cons outweighed the pros and I concluded it's not worth it. I am learning that some clients are beyond not involved and feel that the work you do for them can wait, frustrating. The only reason I would consider taking on any 3(16) responsibility is why this post was started by CLE401kGuy... to speed up the process of getting a form 5500 signed and filed timely. I bet it will be listed for others to review ->Erisapedia Webcasts

#2, for plans that DO impose a last day requirement, as long as that is the case you can amend mid year? The plans that I am handling I intend to restate in early 2022 to meet the 7/31/2022 restatement deadline. Should be no problem (if the client agrees) to move to a X-tested plan for more flexibility? Ya, #3 gets into how other business' operate. Appreciate the help.