Basically

I just learned that the 1099-Rs for a 2024 RMD and plan closing rollover to an IRA were not filed. I created the forms but the 1096 needs to be signed. What are my options? Can I sign the form as a "paid preparer"? Could I apply for a PTIN and file the return?

Thank you all for your help. The adoption agreement indicated "add just enough" opposed to "amend". I also reached out to ftWilliam (Wolters Kluwer now I guess) support who assisted me to ensure I followed what the basic plan document says. They also helped me use the compliance software procedure correctly (I was not clicking one of the checkboxes). All good

Thanks! I will look at the document

I had 3 employees terminate during 2024 in this dentist practice. As a result the 410(b) average benefits percentage test has failed. The solution is to overide the test and add back into the mix one of the terminated employees. Does it matter which employee I override and provide a PS contriution to in order to pass the test? Of course the obvious choice would be the one who earned the least because that the contribution amount would be smaller.

This client has always been a single member business... not worried about losing that status. They are simply looking to make an investment and the application is asking "is this an ERISA plan". I think after googling and reading all different articles and posts I understand that ERISA was created solely to protect plan participants. I see that when you have a single member business with no one to protect, well, those ERISA rules don't apply... aren't necessary. I run/advise Solo plans like plans with employees. I think I just looked at the Solo plan as an easier plan to handle due to not needing to be worried about coverage, non-discriminiation and other necessary requirements that a larger plan must provide/adhere to. I will let them know that the plan is indeed not an ERISA plan. I will add that the plan is a Qualified Retirement Plan as it meets all the IRS requirements. Thanks for your input and help.

This plan is a single member business plan run according to all typical ERISA and DoL requirements. It's a qualified plan using an IRS approved plan document. But technically, is it an ERISA plan? For this new plan investment the sponsor wants to invest in, do they check the box "yes" this is an ERISA plan?

I don't know his personal financial situation. He has $900K in his rollover account. I think he was thinking this was the easiest process... even thought he would be paying 20% in withholding. I will let him know that the rules are what they are and unfortunately there is no getting around the 10% penalty. Appreciate your response.

A client needs to bring his father over to live with him due to his age and health. There is a rollover account with plenty of money in it but the client is only 57. The renovations needed to make the house usable I guess is a lot ($100K+... I didn't ask why so much). There is already a personal loan in place and I don't know if you can call pulling that much out of a plan a hardship. I've looked and there is no exception to the 10% early distribution penalty. Is it as cut and dry as that? There is nothing he can do or say to be spared that added 10% for his noble effort caring for his elderly dad? Roll out some of his rollover account to somewhere and then pull what he needs without an early dist penalty from there? Trying to think outside the box at this point. Thanks

Thanks! This helps. I looked at the plan adoption agreement and found this... For calculating the ERNEC I would not include the 2% insurance premium. I think I should be consistent though... the match should probably also be checked, agreed?

I shouldn't have said "I was told no"... when the client calculated the SH Match they said the medical premium doesn't count as compensation. Their calculation of the SH Match didn't use $319,749.62, only $285K. The adoption agreement says this... The document defines W-2 Compensation as... Which would lead me to say that we do include the S-Corp 2% Medical Premium paid to him. $319,749.62 would be his compensation.

Does this help? Straight off of the W-2. I did include the S-corp 2% medical premium as compensation but I was being told no. If I do then the comp is $285,000 + 34,749.62 = $319,749.62 The SH match would be 4% of 319,749.62 or $12,789.98. They deposited $11,400 and I said they are short $1,389.98. I started second guessing myself.

I have always thought that gross compensation for contribution calculations would be Box 5 of the W-2... Medicare Wages. Med taxes are on your gross wages. Box 1 would be less if a pe-tax deferral was taken, but we want gross wages earned so Box 5 would be the number to use. What box would be used to calculate a SH Match contribution?

The document is a Wolters Kluwer document. I reached out to support and they promptly provided the language in the document that steered me in the right direction. Thanks for the response!

The form doesn't require the claimant to indicate from which money pool the distribution should come from nor did he indicate his desire. The form dose not state a default. As Pam Shoup suggested, I have completed a W-4R form for him to sign. I think I'm good 🙂... yes?

Roth Account... This partisipant has 4 different money pools: PS SH Pre-Tax Deferral Roth Deferral The plan document says that we can pull money from all plan accounts to complete this hardship distribution. In my mind I feel it would be best to preserve the Roth deferral account and pull all of the money needed to complete the hardship distribution from the other 3 accounts. Make sense? Any reason I shouldn't?

Thanks! I didn't know the Hardship wasn't automatically subject to 20%. So I guess I should ask the participant what % they want to have withheld? Also... his deferrals are all Roth. I need to look into that and understand the tax complications there.

I have a participant who has a legit hardship. His wife has become disabled. The medical and credit card bills are getting out of hand because his state is dragging their feet with any state benefits. Simple question... just want to be sure... it's just like any other distribution, correct? Taxes need to be withheld (20%). The 1099-R will be coded properly and if there is no exception he will pay the excise tax when he does his personal taxes. Am I correct? Missing anything? Thanks

Thanks! I knew there was a reason I use a service like Penchecks. If you are familiar, the base fee is $35. For these small payouts I was just trying to save the terminated participant some $$. I appreciate everyon's responses!

Yes... just a small amount in cash... a dividend or something. SH 401(k) plan. I will put $200 on my bulletin board as the magic number.

$200 is the magic number? no higher? Just making sure Thanks

I am horrible at searching the message boards. Is there a number at which point taxes do not need to be withheld from a distributtion? Reason... Bob was paid out but the financial advisor didn't wait for everything to settle and now there is $150+/- still in the investment account. I am happy to generate a 1099-R if it is acceptable to liquidate the account and send it all... no withholding. Is that ok? Is there a magic amount when taxes are not required to be taken? Just be sure it is reported via a 1099-R? Thanks

It's little things like this that make this forum so important.... so valuable. In the example where the check was generated/written in 2024 but ultimately cashed early in 2025, I would have gone with the reasoning that the funds left in 2025 therefore it is a 2025 payout. How about this... Letter of Authorization dated December 28, 2024 submitted to the financial advisor to payout a terminated employee. The funds were to be transfered/ach'd/wired... not a check... to the participant but the payout is not actually complete until 2025. Would you go by the LOA date? A 2024 payout and 1099-R?

51% top heavy now so all good there. Yes, I will keep an eye out for that in the future. Thanks!

Is this correct: If a business has all HCE employees (each earing well in excess of the HCE compensation limit... in fact in excess of the 401(a)(17) limit), when it comes to allocating a PS NEC contributoin, can the allocation be discriminitory? Can the owner of the business max out himself and contribute zilch to everyone else? Even pick and choose who might get a NEC contribution? Seems to be passing the tests when I run them all. I've never had this kind of a situation. If all good, I'm pleasantly surprised (and so will the business owner be). Thanks

Trying to payout this account. The participant (80) died in 2023. Has been taking RMDs. We need to take an RMD for the spouse now so we can roll the balance to her IRA. Do all pension RMDs use the uniform life table? CPA wonders if it should be a single life table. Thanks