The loan policy states a loan may only be taken for a safe harbor hardship reason. What if the documentation of the financial need ($900 medical bill) is less than the loan minimum ($1,000)?

If a client's plan is excluding leased employees, do you check to see if:

A person shall not be considered a Leased Employee if: (i) such person is covered by a money purchase pension plan providing: (1) a nonintegrated employer contribution rate of at least 10 percent of compensation, as defined in Code section 415(c)(3), but including amounts contributed pursuant to a salary reduction agreement which are excludable from the employee's gross income under Code sections 125, 402(e)(3), 402(h)(1)(B), 403(b), 132(f) or 457, (2) immediate participation, and (3) full and immediate vesting; and (ii) Leased Employees do not constitute more than 20 percent of the Employer's nonhighly compensated work force.

I never thought to ask if their leased EEs are covered under a MP. And what is the second part saying? Leased EEs must make up more than 20% of the workforce in order to be considered leased and able to be excluded?

Plan Sponsor has a PBGC-covered DB Plan and a 401k Profit Sharing Plan. I understand because of the PBGC coverage there is no combined deduction limit. However, does the 25% limit still apply to the DC plan only? My understanding is that yes, it does. For example, they could deposit and deduct as much as they want into the DB Plan. And in the DC Plan, anything up to 25% of compensation is allowable. But anything over 25% in the DC plan would be a non-deductible contribution and subject to an excise tax.

Does anybody know the fees that Charles Schwab charges for a small business 401k?

One-person plan has a plan document prepared by prior TPA using one of the national vendor's volume submitters. It is not the TPA's own document. It is also not the vendor we use. Looking to control costs, wondering about preparing the H/S amendment only, rather than restate the plan document. Think that works?

§ 416(g)(4)(H) stipulates:

https://uscode.house.gov/view.xhtml?req=(title:26 section:416 edition:prelim) OR (granuleid:USC-prelim-title26-section416)&f=treesort&edition=prelim&num=0&jumpTo=true

Cash or deferred arrangements using alternative methods of meeting nondiscrimination requirements The term "top-heavy plan" shall not include a plan which consists solely of- (i) a cash or deferred arrangement which meets the requirements of section 401(k)(12) or 401(k)(13), and (ii) matching contributions with respect to which the requirements of section 401(m)(11) or 401(m)(12) are met.

https://uscode.house.gov/view.xhtml?req=(title:26 section:401 edition:prelim) OR (granuleid:USC-prelim-title26-section401)&f=treesort&edition=prelim&num=0&jumpTo=true#substructure-location_m_11

https://uscode.house.gov/view.xhtml?req=(title:26 section:401 edition:prelim) OR (granuleid:USC-prelim-title26-section401)&f=treesort&edition=prelim&num=0&jumpTo=true#substructure-location_k_12

https://uscode.house.gov/view.xhtml?req=(title:26 section:416 edition:prelim) OR (granuleid:USC-prelim-title26-section416)&f=treesort&edition=prelim&num=0&jumpTo=true

https://uscode.house.gov/view.xhtml?req=(title:26 section:401 edition:prelim) OR (granuleid:USC-prelim-title26-section401)&f=treesort&edition=prelim&num=0&jumpTo=true#substructure-location_k_12

https://www.irs.gov/pub/irs-drop/rr-04-13.pdf Rev. Rul. 2004-13: Section 416(g)(4)(H) provides that the term "top-heavy plan" does not include a plan that consists solely of (1) a CODA that meets the requirements of § 401(k)(12) and (2) matching contributions that meet the requirements of § 401(m)(11). Section 416(g)(4)(H), which is effective for years beginning after December 31, 2001, was added to the Code by the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. 107-16.

Rev. Rul. 2004-13 presents the following hypothetical scenario:

Situation 1. A nongovernmental profit-sharing plan containing a cash or deferred arrangement ("CODA") described in § 401(k) provides for safe harbor matching contributions that are intended to satisfy the requirements of § 401(k)(12)(B) and otherwise satisfies the requirements of § 401(k)(12). The plan also permits the employer to make a nonelective contribution for any plan year at the employer's discretion. The nonelective contribution is subject to 5-year vesting described in § 411(a)(2)(A) and is allocated to participants' accounts in the same ratio that each participant's compensation bears to the compensation of all participants. The plan is a calendar-year plan and covers all employees of the employer (including highly compensated employees as defined in § 414(q)) who have 1 year of service and are age 21 or older. Other than elective contributions and the matching contributions, no other contributions are made to the plan for 2004 and there are no forfeitures.

Later on, Rev. Rul. 2004-13 features:

In Situation 1, although the plan provides for discretionary nonelective contributions, none are made for 2004 and thus only contributions described in § 401(k)(12) or § 401(m)(11) are made to the plan for that year. In Situation 1, the plan meets the requirements of § 416(g)(4)(H) and is therefore not subject to the top-heavy rules in § 416 for 2004 because no other contributions are made to the plans other than contributions described in § 401(k)(12) or § 401(m)(11).

So, to present a salient inquiry, if a plan as the option for the endorsing employer to make an allocation (compensation to compensation, permitted disparity, set dollar amount, set percentage, etc.), and that plan has a CODA feature, if in one particular year the employer does not avail of said allocation option, and only makes safe harbor CODA contributions, the plan stands deemed as passing § 416 strictures. If an employee other than a key employee lacks an allocation for that year, due to a lack of deferrals if the safe harbor contribution occurs as a matching contribution that serves as a function of a deferral, then the compliance with § 416 strictures remains intact. Please indicate if my understanding of the situation stands as correct.

Our client wants to allow for In-Plan Roth conversions regardless of age. Does not want to require the participant to be of in-service distribution age for any money source. Can someone provide guidance on how to amend the Relius volume submitter document to allow such provisions?

I have joint custody with my ex-wife of our 13 year-old child. She pays for the child's medical expenses with her husband's FSA. Under my support order, I am required to reimburse her 65%. I reimburse her with my HSA account. My question is whether this is a qualifying expense for my HSA. She is using tax-free money, getting reimbursed cash (by me), and not having to claim it as income because it is considered "support." This seems like a sketchy way of using an FSA to cheat the IRS. Would love an explanation here as to the legality of what she is doing. She insists on paying and having me reimburse her because the bill is in her name and says she wants to insure timely payments. She sends me the medical bills and payment receipts which I keep for my HSA records but since I am paying her and not the medical facility, is it still a qualifying expense under my HSA?

Wheee... just got an e-mail from someone who had adopted a Section 125 plan approximately 20 years ago. Never amended or updated since then. What happens if they don't do anything? I'm not even sure where to start to determine what "required" changes/amendments etc. would have been missed, and when. Because there is no EPCRS equivalent for Section 125 plans, then, for prior years that were "noncompliant" in terms of document language, the pre-tax deductions could be disallowed upon audit. Perhaps all that can be done is to adopt an updated document and hope for the best for all prior years. Do you know of any good source(s) for information to determine what updates were missed, and when? As to the consequences of incorrect documents, I'm really asking whether there is any guidance in addition to Prop. Reg. 1.125-1(c)(1) through (7). Should I have them talk with legal/tax counsel re the possibility/advisability/risk of initiating some sort of settlement with IRS?

A recently deceased client's IRA has several beneficiaries, all of whom are foreign nationals. Can these beneficiaries set up rollover IRA's in the U.S. to avoid having to pay taxes? Do the beneficiaries have any other ways to keep the monies tax-sheltered?