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Message Boards Digest

August 25, 2020

Here are the most recently added topics on the BenefitsLink Message Boards:

5500sorBust created a topic in Form 5500

Summary Annual Report for 5500-EZ?

"Is the SAR only required for 5500 & 5500-SF filers? Or is it required for a 5500-EZ filer as well?"
1 reply   |    29 views   |    Add Reply

Pammie57 created a topic in 401(k) Plans

Tax Withhholding Versus 401(k) Deferral on Irregular Pay

"Our client's document says deferral election applies to irregular pay. However, they often issue very small second checks for some reason (like under $100). An issue arose when the payroll company withheld FIT on a small check and no 401k deferrals... They quoted the OHS (Office of Human Services) that FIT withholding takes precedence. Anybody seen it handled differently? The plan was audited by a CPA firm and they took issue with no deferrals being calculated prior to FIT. So an impasse..."

1 reply   |    34 views   |    Add Reply

Santo Gold created a topic in Distributions and Loans, Other than QDROs

Distribution to Fired Employee Who May Be Reinstated

"A participant in a 403b was fired and has requested distribution of her retirement plan accounts. She filed a grievance of wrongful termination through her union and wants to be re-employed. Although I'm told that it's not likely she will win, should the plan act on the distribution request even though there is a chance she would be rehired soon?"

1 reply   |    34 views   |    Add Reply

Cindy Anderson created a topic in Employee Stock Ownership Plans (ESOPs)

Can ESOP Trustees 'Choose' Whether Someone Is Eligible for Disbursement?

"I have a significant amount of $ in an ESOP plan for a company where I terminated my employment in December 2016. Their fiscal year runs through 9/30. Finally in 2019 -- I was eligible to request my first distribution -- which I did -- and requested the full amount paid out -- as I just want to be done with all of this.... They chose to only pay out a partial distribution (~ 1/4 of what was in the account) -- never informed me of how or why or anything else -- just made a partial payment and closed the window of opportunity, so to speak.

Fast Forward a year, and it is now that the window to request a distribution is open again -- and I would like to make another request for my $ -- as COVID has significantly affected our family and business financially, and there are some tax benefits to requesting it now.

I contacted the company who is handling my account (which is what I am told to do by my former employer -- not to contact them). I was told that I 'may not' be eligible to request a distribution this year -- because the company can pick and choose who may or may not request one?! How is this possible?

They already have the choice as to whether or not to pay me when I do request one. Now they get to decide whether or not I can even actually make the 'request'?? Is it possible that because I requested a full payout last year when I was eligible, they are considering that as a 'request' for payment however/whenever they decide to give it to me?

At this point, I separated from the company nearly 4 years ago, and just want to roll this $ into my IRA so they no longer have control of it."

2 replies   |    48 views   |    Add Reply

austin3515 created a topic in 401(k) Plans

Comp Exclusions in a Match -- a Benefits Rights and Features Issue?

"IF a plan document excludes overtime for example from the match calculation, does that present a benefits rights and features issue? How would that test even work? People with no overtime are treated as benefiting the same as HCEs? My brain starts to melt down. I would have thought that, if I passed testing based on a 414(s) definition of comp, then I was OK. I have never heard of this before in 20 years."

2 replies   |    44 views   |    Add Reply

Ian created a topic in 403(b) Plans, Accounts or Annuities

IRS Tax Levies on 403(b) Annuity Contracts

"Can the IRS enforce a tax levy on 403(b) plan annuity contract payments? Does it matter if the 403(b) plan is an ERISA plan? Are these answers any different if the levy is imposed on the 403(b) annuity contracts before they are distributed?"

2 replies   |    36 views   |    Add Reply

Tax Cowboy created a topic in Employee Stock Ownership Plans (ESOPs)

Is IRS Form 1744 Final ESOP Audit Closing Letter?

"Clients' retirement plan Form 5500 for tax year 2017 was audited, beginning in August 2019. IRS requested a plan document amendment, which then was made (several months ago). We just received IRS Form letter 1744 signed by the area manager, stating that the audit has been completed. On page two it states an amendment was signed. Is this the final closing letter? Can the IRS now open up any subsequent tax years?"

0 replies   |    21 views   |    Add Reply

JMP created a topic in 401(k) Plans

Individual Has Two Schedule C's -- So They Can Have Two Retirement Plans?

"Client has 2 Schedule C's, shows profit on both Schedule C's. Can the client have a Solo 401k plan for 1 Schedule C, and a SEP or Profit Sharing Plan for the other Schedule C? Can they maintain both plans and fund them both to the limits?"

2 replies   |    34 views   |    Add Reply

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