If a participant takes a $200,000 in-service withdrawal (and pays the 20% mandatory tax withholding), then they decide they don't need the money after all, can they put it back into a plan or an IRA? Or is it a done deal since it was a cash distribution to the participant?

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A coworker has a plan where everyone's his/her own group, but still has a last day/1000 hours rule. Also there's a safe harbor 3% for everyone. There's a young HCE (owner's daughter) who made 108,000 or so in 2018. And a couple of NHCE terminees who only got the 3%. The profit sharing allocation was run such that each individual's group was allocated the exact same amount they would have gotten if the plan were written to be integrated at $80,000, with the percentages backed into by solving to get the parents to $61,000. (Maybe something like 13% of pay plus 4.3% of excess over 80k.) That, in and of itself, would be a safe harbor formula. But since it's not actually written that way in the plan document, is it enough to simply pass the coverage on the additional profit sharing? I'm concerned that because the integration level is $80,000, the young HCE got an extra "integrated piece" that would not normally have come into play had the actual TWB been used as the integration level. And so, when general testing the actual amounts, her total allocation rate (imputing disparity) ends up being just slightly higher than everyone else's, thus failing her rate group. Does that matter? In other words, is it enough to run the plan as though it were an integrated formula and hang our hat on that? Or does the fact that the document doesn't actually say it's integrated, mean that we have to general-test it with the actual taxable wage base in those calculations?

The employer is an S Corp tax filer, calendar year, cash-basis. The plan covers the owner and 2 staff members, 1 of whom terminated in 2018. The other staff member terminated end of Q1 2019. There is no last day required for any contributions. Employer contributions: 3% SHNEC plus discretionary PS. Plan is cross-tested. We have just been notified that the business return was filed on time and was not extended. This is the 1st plan year and the company prepared their own returns. Today, they hired an accounting firm.

• 1120 reported $41k in retirement contributions
• The employer had intended to contribute $49k employer contribution (SH+PS) for the year but reported $41k because it is "cash basis" and this was the amount actually deposited into the plan during 2018 (note, this $41k included 401k plus SH deposits)

Of the $41k contribution reported, only $11k was contributed by the due date of the tax return (3/15/2019). The balance remains due, therefore is outside the 30 day Annual Additions window for 2018 Limitation Year. The $11k deposited was SH but there is about $1k SH contribution remaining due for the year. [1] Does EPCRS provide a correction such that the employer can deposit the $30k balance ($1k SH + $29K PS) at this time and in doing so avoid amending the 2018 tax return? Or can it be deposited under EPCRS however they must amend 2018 to reduce the deduction to $11k, and deduct the $30k on the 2019 tax return, along with any 2019 plan year contributions, of course subject to 404 limits? [2] Also, wouldn't depositing it now for 2018 PY count towards the 2019 Annual Additions LY for each participant who shares in the allocation of it because outside the 30 day window? If so, one participant terminated in 2018 therefore 2019 Annual Addition limit is zero for him -- is there any correction available for this? The other staff member terminated at end Q1 2019... may be okay with 2019 Annual Addition limit. Will this ultimately make it impossible for the employer to contribute any PS for 2018 because of this Annual Addition issue, limiting the employer to only the SH for 2018? [3] If the Employer decides to leave the 2018 Return as filed, make the deposit now and the plan is later audited and the $41k deduction is reduced to the $11k, how are the contributions over and above the $11k allocated for 2018 corrected (i.e. the $30k)? Both of the staff members are now terminated and 0% Vested in the PS portion. Assuming they elect distributions, the non-vested PS portion will forfeit.

Many of our clients plans permit participant loans to be repaid through "home bill" or "direct bill" (i.e. non-payroll deduct). Is there a best practice for handling an automatic stay issued pursuant to a Chapter 7 or 13 bankruptcy filing in connection with these type of loan repayments? We understand the Bankruptcy Code (section 362(b)(19) exempts payroll deduct loan repayments from the automatic stay, but the code is silent on non-payroll deduct repayments. Does that mean non-payroll deduct loan repayments are subject to the automatic stay? If so, are defaults suspended too during the stay?