erisa parrot Posted July 10, 2015 Posted July 10, 2015 Suppose an owner of a company sets up a individual 401(k) plan in December 2015 after getting married in November 2015. The soon-to-be wife has worked with the company for a few years. Can he still make the effective date of the plan 1/1/2015 and meet the eligibility requirements of an individual 401(k)? Obviously his significant other would not have been his spouse on 1/1/2015.
jpod Posted July 10, 2015 Posted July 10, 2015 There really is no such thing as a solo 401(k), so please explain what you are trying to accomplish or avoid.
erisa parrot Posted July 10, 2015 Author Posted July 10, 2015 There really is no such thing as a solo 401(k), so please explain what you are trying to accomplish or avoid. I am referring to a one participant 401(k) plan that allows an individual and his spouse to participate. There are some minor differences, including requirements for Form 5500 reporting. Here's a link if you really don't understand the reference. http://www.irs.gov/Retirement-Plans/One-Participant-401%28k%29-Plans
jpod Posted July 10, 2015 Posted July 10, 2015 I get it. Is your question whether it is a one-participant plan for 5500 purposes? If so, it seems to me that if a non-spouse employee was eligible to participate at any time since the effective date then it is not a one-participant plan for those purposes for 2015. 2016 would be a different story.
erisa parrot Posted July 10, 2015 Author Posted July 10, 2015 Got it. Do you agree if they got married on 11/15, and the effective date were 11/16, they could operate the plan based on individual 401(k) plan provisions, since at that point, no non-spouse had the ability to participate?
Buffys Redrum Posted July 10, 2015 Posted July 10, 2015 If married 11/15 and the plan was established 11/16 (the day after) - the plan would be eligible for a Form 5500-EZ filing for the 2015 plan year as an owner-and-spouse plan.
mbozek Posted July 10, 2015 Posted July 10, 2015 Under the IRC a couple is considered married for the entire year if they are married at the end of the year. Under IRS regs a qualified plan can be established on the last day of the plan year and employee compensation earned during the plan year can be included in determining the employer contribution for the year. If the couple is married in Nov 2015 and a 401k plan for calendar year 2015 is adopted on Dec 31, 2015 why isn't the plan eligible to be a solo 401k plan for 2015? K2retire 1 mjb
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