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Message Boards Digest

April 6, 2023

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

PensionPro created a topic in 401(k) Plans

Match Coverage Failure and ADP/ACP Testing

"Matching contributions fail coverage due to allocation conditions. [1] To correct, we have to provide QNEC to some NHCEs at the ACP rate. Can these QNECs be used in the ADP tests? Can they be used in the ACP test I believe the answer is yes to both [2] Or do we run the ADP/ACP tests first, then make QNEC to correct ACP failure which will correct the match coverage failure? I think # 1 is the correct methodology, but looking for other opinions."

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DPSRich created a topic in 401(k) Plans

Applying COVID Loan Repayment Amount to Taxable Distribution Amounts

"A client took a covid related distribution in 2020. We elected to have it taxed in 2020, 2021 & 2022. In 2022 she repaid $20k (she had 3 years to repay all or part). The $20k is less than the 2022 deemed taxable portion. From what I have read, I have to act as if the original distribution was $20k less and basically spread the $20k over 3 years. Correct? Of course I would prefer to apply it all to 2022 for ease, but I think that is wrong."

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