Nassau Posted June 27, 2011 Posted June 27, 2011 Participant was rehired as an employee in 2008 but with no 401K eligibility. He never became a participant again in the plan, so he is technically still a "terminated" participant that is above the age of 70.5. The money deposited to his account in 2009 represents earnings due to an error in 2007. So, my question is this money still subject to an RMD? (as both cost basis and earnings are subject to RMDs). Please note, Per client ppt was rehired on 12/08/2008 as a special contract dentist with no 401k eligibility.
ETA Consulting LLC Posted June 27, 2011 Posted June 27, 2011 I would still say the 2008 year end balance was zero. Otherwise would be like splitting hairs. Also, since he is not an employee (as independent contractors are not common law employees), then his first RMD requirement for that transaction would've been December 31, 2010 (assuming the plan was amendment to waive 2009 RMDs. Good Luck! CPC, QPA, QKA, TGPC, ERPA
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