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Total compensation for all eligible participants = $950,000 Then, 25% of total compensation = $237,500. Which sources will be counted for this deduction? (Profit sharing, Safe Harbor, Match.. which sources are to be count Thanks in advance.

I have one small organization, Company A, that merged with 4 other organizations for a new controlled group company NewCo effective 2/1/2020. Company A has a cash balance plan, and as of 12/31/2020, Company As cash balance plan will be terminated, and NewCo will have a CB plan for the whole CG as of 1/1/2021. Company A would like a full accrual for 2020, resulting in a 120k contribution. They are doing their 1/1-2/1 short tax year filing now, and wanted to know how to put the contribution on there if it hasn't been made yet. My thought is on the final 2020 filing, they change the plan sponsor to NewCo on Line 4, put all of the 2020 PY contributions on the SB, Company A pays all of the contributions, and NewCo allocates the deductions to them within their financials. Does that sound accurate? If they've made any contributions to date, could those be deducted on the short tax year filing? Thanks for any help!

Good afternoon to all, I have been asked to research a question presented by a referral source. I do not have any more information that what is presented below: "I have a client who was a W2 employee January - September of this year. His employer did not have a 401(k) plan and he made no contributions to other plans. As of October 1, he changed his status to 1099 contractor for the same company. When he changed his status it triggered deferred compensation, a lump sum of $400,000 which he will receive at the end of this year. For October - end of the year, he will receive approximately $60,000 of 1099 income from the new consulting business. Both the owner and the spouse are over 50 years old. He wants to max out his Owner K to help defer some of this very large tax bill. Can he use some of the deferred comp? Or can only the 1099 income go into the Owner K? Same question for the wife. It was previously stated that she could receive a contribution, but is her limit subject to the 1099 income, or can the deferred comp dollars count?" This is not my area of expertise and while I have a general notion that deferred compensation is not able to be used in retirement plan contribution calculations, someone out there may know of exceptions to this. Any help will be appreciated.

We had a new earnings code used for group of associates on our last payroll that was not setup correctly as 401k eligible. It was caught after 1 payroll and will be corrected on the subsequent run. So while everyone who elected a deferral had their deferral calculate on part of their earnings, there were some whose contribution did not calculate on all of their earnings due to this code. For example, base salary $500, new commission code $100, 10% deferral should have been on $600, but we took on $500.00 Proposed correction method is letting everyone who was affected know that they can increase their deferral to make up for any part on their end, and let our match true up catch anyone who missed a match contribution. (safe harbor plan, match contributions every payroll with true up at year end) Comments? We at first thought we had to do QNEC on match, however, would get double match at true up time.

Hi, I am relatively new to this site and if I am asking the wrong question in the wrong place, I hope someone will say so! I thought I posted this question yesterday and it seems to have disappeared. If a client's 2016 corporate tax return is on extension from March 15th of 2017 to September 15th of 2017, normally speaking, the client would have until September 14th of 2017 to make the final 2016 contribution deposits such as match, profit sharing and Safe Harbor. Now, with Hurricane Irma relief, the client's corporate return does not have to be filed until January 31st, 2018. Does that mean that the client now has up until January 30, 2018 to make his final 2016 contribution deposits? Thanks in advance for any advice!

I am a recent college graduate and just landed my first full-time job, so am very new to understanding 401(k)'s and retirement plans. My company says that they will match "up to the first 6% of your pre-tax contributions each pay period." For example, if I contribute $100 every pay period, they will match $6? EDIT: The rate is as follows: 200% on the first 2% that you contribute per pay period 50% on the next 4% that you contribute per pay period

Quick question: We reconcile our plans on an accrual basis for Form 5500 SF reporting. Because of this we end up with receivable contributions from one year to another, typically due to pending payrolls. We have had a question come up because of this. Our sponsors will mark a payroll file (for example) as the payroll period 12/01/15 to 12/31/15, with a pay date of 01/15/16. The payroll is then processed when given to us, say 01/16/16. Would you mark this payroll as a receivable contribution for 2015 because of the pay period OR would you leave it off of the 2015 plan year because of the actual pay date to ppts of 01/15/16? Advice is appreciated, thanks!

Can IRA owner rollover error be repaired during current tax year cycle? In February, 60 year old IRA owner takes $8,000 distribution. In March, replaces funds as a “Rollover Contribution”. In December, changes IRA custodians, UNFORTUNATELY, Original custodian sends check made out to IRA owner’s name (e.g. a rollover) instead of new Custodian’s name (e.g. a custodian-to-custodian transfer). IRA owner deposits check in new IRA with Custodian B. Since IRA owner has not completed tax forms for the year, can he remedy through re-characterization? For example: Re-characterize $6,500 of the $8,000 March Rollover Contribution as a Regular Contribution, Withdraw the extra $1,500 as an excess contribution, Deposit the extra $1,500 as a regular contribution to spouse IRA to mitigate the income tax? Or are other remedies available, given that this is within the current tax year cycle?

How do you calculate the Average Benefit if you are testing the plan on both allocations and accruals. I know if you test on accural, you use the ABT for accuals, and if you test on allocation, you use the ABT for allocations, but what happens if you are passing the rate group testing by testing some on alloactions and some on accurals - what average benefit test do/can you use? Do you have to take the ABT for the employees tested on allocations and do a seperate ABT for those testing on accurals? Thanks for your input

Client with an ongoing safe-harbor 401(k) plan is considering putting in a Defined Benefit Plan (no PBGC coverage) with expected contributions above 31% of pay. Any 404(a)(7) issues in the first year with the new MAP-21 and PPA rates? For example, assume two participants in 2014: Salary 401(k) derral safe harbor match A $200,000 $23,000 $8,000 B $30,000 $3,000 $1,200 Under the new DB plan for 2014 the MAP-21 minimum required contribuiton would be $75,000 and the PPA maximum would be $100,000. What would be the maximum allowable combined deduction? Thanks in advance for all responses.

We are an organization that offers health insurance to all of our employees, paying all or almost all of the employee only premium options and not contributing very much additional premium for family, children and spousal levels. We also provide $140 a month in HSA employer contribution to the employees who elect our HDP (HSA eligible plan). Essentially, we pass the cost savings of the lower premiums on to our employees through this contribution. The HSA plan is part of our Section 125 plan. We have one employee who can be much better off financially to obtain a HDP for his wife and himself on his own, directly from an insurance carrier (even considering his premiums will now be post tax). Our HSA administrator will not allow him to participate in our Section 125 HSA payroll deductions and therefore will not allow him to receive the $140 a month in employer HSA contributions. They claim this is because they have no way of confirming his actual eligibility regarding participation in an HSA account. Our question is whether or not we can make a $140 contribution directly to his HSA account and what the ramifications of that would be. We know that Employer Contributions without a Section 125 Plan are allowable (assuming comparability rules are met, etc.). Having said that, we wonder if, by having a HSA as part of a Section 125 Plan, we are precluded from also have HSA Contributions that do not relate to the Section 125 Plan. We would make this opportunity available to all employees (all who participate in a different HDP plan would be able to receive the contribution) and in the same monthly amount as those inside the Section 125 Plan (both sides would receive the $140). It seems silly to force the employee to pick an employee plan with us and an individual spouse plan with the insurance company just so that he can get our $140 a month, something that will happen in this case and cost our company a lot more money. Any thoughts would be appreciated.