Creating PFB

[Guest Xerxes]

OK PPA confusion reigns again.

PPA allows creation of PFB only to the extent discounted cash contributions exceed the minimum required before application of credit balance. For example, minimum before cb = 4,000, cb = 2,000, discounted contributions 4,500, then maximum PFB = 500.

Yet 2010 schedule SB instructions for line 38 now say to subtract CB adjusted minimum (if CB actually applied) from discounted contributions to come up with maximum PFB.

I didn't think it mattered whether or not you used CB for quarterlies or not in terms of the maximum PFB allowed to be created. The instructions seem to imply that you can now essentially get the PFB back if you later contribute in excess of the minimum reduced by PFB.

Anybody else see this?

[FAPInJax]

The final regulations modified the way credit balances and stuff work. The rules now permit you to use the credit balance (carryover balance) and create an excess. This moves the monies into the prefunding balance (that is not as attractive an option for the most part).

The proposed regulations would have lost the carryover balance and this change was deemed to be a good thing <GG>