Message Boards Digest

April 14, 2023

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

DMcGovern created a topic in Correction of Plan Defects

Erroneous 'Contributions' to SIMPLE 401(k)

"This comes from a CPA we work with. I'm not familiar with SIMPLE plans, so hoping others here can help. The client had a SIMPLE 401(k) plan, with the 3% match. The owner somehow managed to start automatically sending money from her personal checking account to the SIMPLE plan on a monthly basis. Normal contributions were made through the company, no excess from that. No match was made on the personal funds. It started in September 2022 and she discovered the error recently. About $5500 in 2022 and again in 2023. Can this be self-corrected by removing the personal funds with earnings?"

No replies yet   |    Click Here to Add a Reply

AmyETPA created a topic in Distributions and Loans, Other than QDROs

IRS Rejecting 1099R: Plan's EIN Deactivated?

"Client terminated plan this year. There was never any turnover in this small plan so the only thing the Trust EIN has been used for was to establish their trust accounts with various brokerage firms. 1099Rs completed using Trust EIN are being rejected from filing electronically saying EIN isn't correct. My guess is actually IRS deactivated the Trust EIN. What is the solution for this issue?"

2 replies so far   |    Click Here to Add a Reply

MarkS created a topic in 409A Issues

409A Correction Program

"Any prohibition against Employer reimbursing Employee the 20% excise tax when using the program?"
3 replies so far   |    Click Here to Add a Reply

dragondon created a topic in 401(k) Plans

QNEC and QMAC vs. Nonelective Contributions

"In the plan accounting, are qnec and qmacs considered the same as profit sharing? So for instance if for non elective contributions we say you must be employed on the last day of the year to qualify for a non elective contribution would that also apply to qnec and qmacs? So in essence are qnec and qmacs also considered non elective contributions and follow all the same rules in the plan doc as a non elective contribution?"

2 replies so far   |    Click Here to Add a Reply

Basically created a topic in Plan Terminations

Is This Plan Terminated?

"A single member plan (Solo) wants to roll out the balance of her plan into an IRA. She is not closing down her business, but she is ceasing her contributions to the plan. She would like to keep the plan around in case she decides to make a contribution at a future date. I know that a plan that does not receive a contribution for 3-5 years means that everyone is 100% vested. Not an issue here with this plan being a single member plan. But can she do this? Empty the plan out and keep it around with a small balance, $1,000 or so?"

8 replies so far   |    Click Here to Add a Reply

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