Guest CCarter Posted May 14, 2002 Posted May 14, 2002 I have a small plan where a participant went over the $10,500 limit and the plan limit (of 15%) for plan year ended 12/31/2001. The participant terminated and rolled their money to an IRA before the 2001 testing was completed. Do I need to do anything or can I do anything where the money has 'left the plan?'
Blinky the 3-eyed Fish Posted May 14, 2002 Posted May 14, 2002 It looks like the only issue on your part is an incorrect 1099 was probably filed. I would inform the participant that he has amounts that were ineligible to be rolled over and that a corrected 1099 will be issued. Ignoring the situation would put the plan at risk. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
david rigby Posted May 14, 2002 Posted May 14, 2002 Revenue Procedure 2001-17 might be a reference. Sorry, don't know if your specific question is there. http://www.benefitslink.com/IRS/revproc2001-17.shtml I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Mike Preston Posted May 15, 2002 Posted May 15, 2002 You didn't give any information that would corroborate the excess 415 issue, so there is no way to give complete advice. Blinky has it right, though. Be prepared for the participant to ask a question: Why wasn't I told in time to pull the excess out of the IRA and avoid the 6% tax on excess contributions to my IRA?
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