New plan under new audit participant count definition

Can't remember seeing this addressed, so...

Are there any circumstances under which a brand-new 401(k) would now meet the audit requirements in its initial year?  I can see any number of participants being eligible to participate at plan inception, but adding participant balances would take time after the implementation date (i.e. start of the plan year), resulting in no participants with beginning balances.  Am I missing something?

For the first plan year only, the audit requirement is based on the number of participants with a balance at the end of the year.

That makes sense.  Thanks!

On 3/4/2024 at 12:00 PM, C. B. Zeller said:

For the first plan year only, the audit requirement is based on the number of participants with a balance at the end of the year.

Does the 80-120 rule apply to first plan year as well? 

2 hours ago, MQS0413 said:

Does the 80-120 rule apply to first plan year as well? 

No, because part of the 80-120 rule is that if you filed as a small plan last year you can file as a small plan this year.  Its a new plan, you didn't file last year.  The determining factor for a new plan is the number of participants with a balance at EOY.