I'm looking at a presentation from an actuarial firm that suggests a 12/31/18 FYE taxpayer set up a CB plan with a 11/30/18 plan year end. The contribution for the 11/30/18 plan year end can be deducted on the 2018 tax return as long as it's made by extended due date. Nothing new there. The suggestion is to fund the plan year beginning 12/1/18 before 12/31/18 so that amount could also be deducted...giving two years deduction in 2018. Of course, all later years would be "normal" Any thoughts/comments on that? The actuarial firm also promotes what I think is a very aggressive 401(h) plan so I'm a bit leery of anything they show.

We have a takeover case in which we want to be sure we correctly identify the Key employees. We aren't sure because we don't know anything about trusts. The company was started by two brothers, whom I'll call Bill and Sam. Bill is the president of the company. Sam has passed away. The ownership of the shares of the company are: [1] 24.7% belongs to a QTIP trust for the wife of Sam, who is not an employee. We aren't worried about this. [2] 41.1% belongs to Bill. That's a no-brainer. He's an owner and the president of the company, so he's a Key and an HCE. [3] Bill's three kids are on the payroll. One of them owns 0.8% of the stock outright. [4] Another 15.9% of the stock is in a trust for Bill's 3 kids, who are treated equally under the trust.

To my knowledge, the trust and the percentages are irrelevant here. The fact that the kids are on the payroll and their father owns 41.1% of the stock seems to me to be enough to make all of them Keys and HCEs. Now Sam, remember, is deceased. Sam's 4 kids are on the payroll, too. One of Sam's kids owns 1.6% of the company outright. Then, as in the case of Bill's kids, 15.9% of the stock of the company is in a trust for these 4 kids and they share equally in it. So one son has his own 1.6% that he owns outright plus 3.98% that he indirectly owns through the trust for a total of 5.58% of the stock being for his benefit. His three siblings just have the 3.98% each that they own indirectly through the trust. Are Sam's kids Key and HCE or not? I don't know what impact the trust has on making this determination. My suspicion is that maybe the son who has the total of 5.58% is a Key and maybe the siblings who only have 3.98% are not, because they have less than 5%. None of these children, neither Bill's nor Sam's, has a sufficiently high salary to be considered an HCE just on that basis. None is an officer of the company with a sufficiently high salary to be considered a Key just on that basis. It's all about the stock.

We have a new client -- Client A -- that was a participating employer in a MEP. The client has decided to leave the MEP and establish its own plan. We've assigned Plan 001 to the client's new plan because it's the first plan being sponsored by Client A. But should we be using 002?

If an employer uses the arrears method for collecting an employee's obligations for H&W benefits while they are on unpaid LOA and the employer elects to forgive the balance in lieu of collecting the balance, is there any way to do that and avoid the imputing of income to the employee? If the employee owes a balance and rather than collecting the balance the employer would like to forgive the amount, do we need to include the forgiven amount as imputed income on the employee's W-2?

We are reviewing a 403b plan that has a service-based employer base contribution. The plan year ending 6/30/18 fails the nondiscrimination test due to the HCEs basically maxing out on their 403b deferrals and the NHCEs not deferring very much. So the NDT failure is with the average benefits test. If it's possible, the least costly solution would be returning a portion of the HCE 403b deferrals. Is that possible and more importantly, within the rules?

Company has DB and DC (MP) Plans. They planned on making a DB and DC contribution for the year ended 12/31/17. Inadvertently they deposited the DC contribution into the DB account (DB plus DC contribution all went into DB account, and was below DB max). Can this be self-corrected by transferring the money into the DC account? If yes, what if the transfer is made today, October 18 (because it's already after September 15)?

Say an employer has a self-insured group health plan. The same plan coverage, waiting period, benefits, etc. are offered to all employees. If HCIs paid, say, 10% of the cost of coverage and non-HCIs paid 50%, we would violate 105(h). If the premium payments by employees remained the same (10% and 50%), but the employer imputed taxable income to the HCIs equal to 40% of the premium, does this solve the 105(h) problem? I know the typical solution in post-termination or COBRA subsidization is to make the premium payment or subsidy taxable. Does this same solution carry over directly to the continuing employment scenario? Alternatively, the HCIs' base salary could be increased, but the employer wants to avoid having to increase base salaries for optics and other reasons.

Does anyone happen to have an Excel spreadsheet template that would calculate match true-up on a bi-weekly payroll basis, instead of an annual basis? Match is 50 cents for every dollar match up to 8%. Payroll is bi-weekly.

A Canadian citizen, living in Canada, has elected to start an annuity from his U.S.-based 403(b). He's requested that the monthly payment be sent to his bank account in the U.S., rather than be mailed to his home address in Canada. [1] Can the 403(b) plan treat the payments as though they were sent to a U.S. person because the bank is located in the U.S. and consequently apply withholding as though he is a U.S. person? [2] If the payments were being sent to a residential address in the U.S. for the same individual, does that change how we apply withholding? [3] If the answer to one of the above is that we can apply withholding as though he is a U.S. person (married with 3 allowances), do the distributions get reported on a 1099-R or a 1042-S?