Form 5500 is done on a cash basis. Profit sharing contribution isn't done until after year-end. Can the plan sponsor claim the profit sharing deduction on its 2017 corporate return even though the Form 5500 won't show it until 2018?

Plan was amended as of 7/1/2017 to exclude per diem employees. It's top heavy. Must the per diem employees who were participants until 7/1 receive a top heavy contribution for 2017?

What's the definition of start date for purposes of eligibility in a 401(k) Plan? Is it first day worked? The first day paid? My client uses a sign-on bonus and pays it at signing. Does this begin the count-down for eligibility? Or can the plan still use first day worked? And the reverse: what's the definition of termination date? The last day worked or the last day paid? For example, a participant terminates on 12/28/2017; his last paycheck is in January 2018. What's the termination date? Is such a participant eligible for the 2017 contributions if the plan has a last-day employment requirement?

I am taking over an ESOP. I don't think the prior TPA handled vesting of rehires correctly via the Rule of Parity. I know of no exception to that rule. If the person had any vested amounts prior to termination upon being rehired, he gets all of his Years of Service for Vesting, I believe, regardless of the number of breaks in service. A person is telling me he had 8 YOS when he terminated. As such he was 100% vested with that money. (In fact, his account is still in the ESOP.) He was rehired well after 5 BIS. The plan records show him as having earned 3 YOS since he was rehired and hence is showing him as being 40% vested on the new money. Am I missing something, or isn't that a violation of the Rule of Parity?

Under the recent tax law changes, personal exemptions are eliminated for 2018. Many health plans allow dependent coverage if the child qualifies as a dependent under a dependent exemption under the parent's tax return. If the parents can no longer claim personal exemptions, can the health plan retain the same test for coverage of dependents?

A plan sponsor has been acquiring a number of companies over the last few years, most of which already had 401(k) plans in existence. To date they have continued the separate plans though they do want to consolidate them by the end of 2018 if possible. One of the companies they acquired has a 401(k) on the standardized adoption agreement from a payroll company. As expected, the plan document extends the plan to all employees of all affiliated entities (relevant plan language pasted below). There are 4 entities with plans, all a parent-sub controlled group. The other 3 plans have 400 participants and $8 million. The one offending standardized plan has 2 participants and $90K. They are well beyond 410(b)(6)(c) now. I've recommended amending that plan with a non-standardized or volume submitter plan ASAP to fix the issue going forward. It's an operational failure in that the plan operations don't follow the terms of the document, but there is no way to conform plan operations to the document. I've suggested a VCP application to allow a retroactive correction of the plan document to exclude the related entities. The client wants their plans compliant but realistically this is a tiny plan and its failure does not put the other plans at risk. Anyone here have any experience with this issue in VCP or other ways to resolve? Document language: 10.7.5 Notwithstanding Sections 10.7.1 through 10.7.4, with respect to a Company that utilizes the Standardized Adoption Agreement, all Affiliates must participate, and the express written consent of the Company shall not be required, unless an election is made under the Adoption Agreement to utilize the Code Section 410(b)(6)(C) transitional rule.

An Affiliate is defined in the plan as follows: 1.1.5 Affiliate: (a) Any corporation which is a member of a "controlled group of corporations" (as defined in Code Section 414(b)) which includes the Company; (b) any trade or business under "common control" (as defined in Code Section 414(c)) with the Company; (c) any organization which is a member of an "affiliated service group" (as defined in Code Section 414(m)) which includes the Company; (d) any other entity required to be aggregated with the Company pursuant to regulations promulgated by the Secretary of the Treasury under Code Section 414(o); or (e) for entities that are not trades or businesses, in accordance with IRS guidelines as published from time to time.

Client needs an in-service distribution from his profit sharing plan; the document allows it. Because the client is under age 59-1/2, obviously the 10% penalty on a premature distribution would apply, plus the 20% withholding requirement. But the client's accountant says these don't apply if the client repays the funds within 60 days. Can that be right?

Participant terminates December 2017. He has a final paycheck payable in the first few weeks of 2018, for services performed in 2017. The plan document states that the compensation paid during the first few weeks of the next plan year is excluded. Would that final paycheck be excluded from both 2017 and 2018 compensation for testing purposes? If so, what if the participant deferred something from that paycheck. Would that deferral be excluded for testing purposes as well?

If our plan is not a safe harbor plan, can we impose a 1-year suspension for a hardship withdrawal, or must it be 6 months?