"When would the 'taxable amount not determined' box be checked on the 1099-R? I have a single member plan (Solo) that came to me asking what is involved to terminate the plan. I asked if ROTH deferrals were made in addition to employer. The answer was yes. I was told that all contributions were deposited into a single investment account. Do we need to go back and calculate the earnings for the ROTH money and the Employer money? As I write this, how can he roll his account over to an IRA? He can't roll it all into a ROTH IRA and at the same time he wouldn't want to roll it all into a traditional IRA and lose the tax benefit of the ROTH deferrals.... So, back to Box 2b, do I prepare one 1099-R and check that box?"

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"Participant was hired in 2018 and was participating in 401k plan. He terminated in 2020, and then was rehired 2 years later in 2022. Since his rehire, he has been working on an as-needed basis. He receives a W-2 and is on payroll when working (not a 1099 employee). He took a full distribution from his account, even though he technically will still work on an as needed basis. Would he have been inelgiible to take his distribution? He wasn't working when he took it and he is not 59 1/2, so it couldn't be considered an ISW. Just curious if technically they could consider him terminated, and then rehired when he works?"

"Wondering if you have an opinion on whether the $250 or less de minimis rule applicable to excess amounts also applies to excess allocations? As you know, an excess allocation is a subset of an excess amount.... There are differing opinions on whether the $250 de minimis rule applies to an excess amount that is also an excess allocation. An example, employee elects to defer 5%, but the plan sponsor withholds 7% in error. The 2% would be considered an excess allocation. Could the plan sponsor elect to use the $250 de minimis rule here? ... [Rev. Proc. 2021-30] doesn't really make it clear enough to be certain."

"The owner of an established construction company XYZ has a 401k plan with 75 employees, purchased car dealership A in 2019. In 2020 they purchased dealerships B & C. All were asset purchases, employees were considered new hires, eligible on first day of employment. Dealership A started their 401k plan as a participating employer of XYZ plan as did B & C when they were purchased. Assets of all of the plans were held with one recordkeeper, using separate divisions for XYZ, A, B & C. Each plan was tested separately and a 5500-SF was filed for each division, using their separate business plan names and TINs 2019 to present. Due to attribution rules, owner owns more than 50% of each business, making it a controlled group. What issues are present in this situation?"

"Retail business A is comprised of multiple locations with a total of approx. 75 participants, owners include 2 families and operates a 401k plan, Family 1 owns 51% of the business. Retail business B is comprised of multiple locations with a total of approx. 40 participants, owners include children of Family 1 (with ownership of 51%) and operates a 401k plan. Retail business C opened in 2008, and is comprised of one location with a total of approx. 5 participants, 25.5% ownership to Family 1, all other owners are unrelated with smaller shares. Retail business D opened in 2015 and is comprised of one location with a total of approx. 10 participants, 51% ownership to Family [1] Participation agreements were created in 2019 using business A as Signatory Employer. Prior to this, they operated their own plan documents. Each plan was tested separately and a 5500-SF was filed for each division, using their separate business plan names and TINs 2019 to present. What issues are present in this situation?"

"In light of the new SECURE 2.0 rules for mid-year replacement of a SIMPLE IRA program with an appropriate 401(k) w/ safe harbor -- is 60 days notice to participants required? Typically employers would have to notify folks by Nov 1 that the SIMPLE would not be continuing for the upcoming year. Since we are past Nov. 1, do folks think notice now is sufficient? Assuming that effective Jan 1 there is an allowed replacement (401(k) SH as provided in SECURE 2.0), is notice now enough? 30 days? Something else?"

"My client has a non-safe harbor 401k plan. They want to terminate it and start a SIMPLE IRA. I know SECURE 2.0 allows a SIMPLE to be terminated mid year and start a 401k plan, but is the reverse true? Can a non-safe harbor plan be terminated mid year and start a SIMPLE mid year? Is a 60 day notice of termination required? I have a Q&A from TAG saying that an advance notice of plan termination is not required (even if the plan is a safe harbor 401k plan.) Is that true?"

"Can the various EPCRS corrections for elective deferral errors be applied separately to different participants? A 401(k) plan sponsor recently discovered that although the definition of compensation for all purposes was total W-2 wages, operationally they were not applying the participants' deferral elections to bonus payments. The employer non-elective contributions were based on total wages. This has been going on for many years. Incidentally, none of the participants has ever raised a question about the lack of deferral from their bonus. The general correction is to make a QNEC in the amount of 50% of the missed deferral opportunity plus earnings. The EPCRS safe harbor correction reduces that QNEC to 25% if corrected within 3 years from the date of the failure (the period for correction of significant errors). Can the plan sponsor correct by providing a 25% QNEC for participants who have been participating for less than 3 years (since the failure as to them is less than 3 years) while providing a 50% QNEC for all longer-term participants?"

"Employer has self-insured health plan. One participant depends on prescription drug to stay alive. The drug is covered under the formulary and normally no issue; however, the drug is in short supply currently and the one network pharmacy for the plan cannot provide on a reliable basis. The drug can, with some effort, be found elsewhere, including at retail, but is out of network. Network provider (ASO insurance company) has suggested coverage be extended at member's current benefit level to cover purchases at any pharmacy that has drug available for temporary period while supply is so restricted. Provider wants employer / plan sponsor to sign an exception form agreeing to cover all costs and also to hold provider harmless, etc. Employer is eager to help and ok with exception generally and picking up the additional drug costs. (The added costs have not been great thus far. They will also clear with their stop loss provider.)

"Part of the hold harmless agreement, however, has Plan acknowledge that making benefit exceptions for the group health plan could violate provisions of state and federal law, including ERISA, the Code, HIPAA, COBRA, etc. and result in significant penalties and adverse tax consequences, etc. Here the member at issue is not a highly compensated individual and the exception being made is tied just to the lack of consistent supply for the drug with the plan's pharmacy network. The drug is covered under the plan and so not an exception in and of itself. The Plan / Employer is just trying to find a way to provide a critical drug that it has otherwise promised to provide.

"Plan wants to know if there really are material discrimination concerns or other significant penalties or adverse tax consequences here that could arise."

"When I make a withdrawal from a 401K they add the federal tax for the tax% I fall into. The thing I am having a problem understanding is, If they are making me pay federal taxes on my withdrawal and adding the taxes to my total withdrawal which becomes taxable income. Then at tax time I am taxed at my total income with includes the taxes they withheld and added to my total withdrawal. How is that not double taxing me for the amount they added to my 401K withdrawal for taxes? seems I am sending the Federal Gov. the taxed for the income% rate of the total withdrawal and then IRS looks at total and I am taxed again??? I realize they are withholding and sending that to the IRS but it is still being added to my total imncome which is used to determine my taxable income for the year."

"A key employee began RMDs in 2021. We have the calculated RMD due 12/31/23. Before it was taken, the employee passed away. His spouse is his beneficiary. Is the spouse required to take the RMD by 12/31/23? Reading the [plan document language quoted below], I interpret this to mean that an RMD is now not due by 12/31/23, but will be due in the year following, or in 2024 (12/31/24). Does this sound correct? Plus we would need to calculate a new RMD amount based on the spouse DOB compared to that of the deceased's DOB. Hoping to get a comment on whether others come to the same conclusion.

• Death On or After Date Distributions Begin. (i) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated Beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's designated Beneficiary..."

"Two clients of ours have received LTR 1072C from the IRS for the plan year ended 12/31/21. These read similarly: Thank you for your 5500-EZ. Your correct EIN is xx-xxxxxxx. You should use this number when filing Form 5500-series returns or Form 5558. If you have questions call or write. Keep a copy of this letter. Cynthia Crowell, Notices/Unpostables Program Manager ** Does anything need to be done for the year ended 12/31/21? Does anything need to be done for the year ended 12/31/22, which has already been filed with the same EIN as for 12/31/21?"