"My understanding is that we do not have to report Independent Contractor NQDC deferrals (Form 1099-Misc, line 12 -- the instructions say this is not required). However, payments to Independent Contractors under a NQDC Plan are to be reported in Box 1 in the year paid. This is how we've been handling this. The problem is we have an Independent Contractor who we paid NQDC to, and reported the payment on Form 1099. The SSA is now saying the reported payment disqualifies the Independent Contractor from Social Security Retirement Benefits. They are asking we correct this using Social Security Form SSA-131, but that form only appears to apply to employees (not independent contractors). I'm having a bit of trouble determining how to correct this. I'm also not finding straight forward information on whether we reported the payment correctly in the first place.

• Should Independent Contractor distributions from a NQDC plan be paid using Form 1099-Misc? The instructions are unclear, unless the payment violates 409A (in which case you use Box 15), but that is not the case here.
• I found some guidance that suggests we use Form 1099-NEC, Box 1, but the instructions for that form don't seem to support this, and I'm not sure it would have helped.'

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"There is no question that, except for defined benefit plan payments made to a spouse or former spouse for child support, the amount paid to a spouse or former spouse via a QDRO (as alimony or as an allocation of property) is taxable income to the alternate payee.... For the first time is 38 years of preparing QDROs I have an attorney for the Participant insisting that the allocation of a defined benefit plan be computed with respect to the 'net' (not the gross) annuity payments paid to the participant, that is, net of the participants state and federal tax withholding, Social Security and Medicare taxes, health insurance and life insurance premiums, and the cost of the survivor annuity. I pointed out that we NEVER use 'net' since the amount is subject to manipulation by the participant and because is forces the alternate payee to pay part of the participant's taxes, but I have been looking for a learned treatise, or law review article, or even caselaw, that sets forth a better and more authoritative argument. Anybody?"

"An ERISA 403(b) plan -- large plan, audited -- was treated as a controlled group/affiliated services group for several years, when in fact, it was not -- it was a MEP. 5500 forms did NOT have the MEP attachment. If amended forms are filed with the MEP attachment, would that require a new audit? It seems unreasonable, as nothing changes except the attachment detailing the breakdown of the assets between the participating employers -- total assets, participant counts, etc., remain the same. Anyone ever encountered this?"

"IRS Notice 2024-2, Section G, Q&A-7 re Section 332 of SECURE 2.0, provides the following: When the SIMPLE IRA plan is replaced by the safe harbor section 401(k) plan mid-year, the total amount that may be contributed as salary reduction contributions under the terminated SIMPLE IRA plan and as elective contributions under the safe harbor section 401(k) plan may not exceed the weighted average of the salary reduction contribution and elective contribution limits for each of those plans (weighted by how many of the 365 days in the transition year each plan was in effect). Thus, the total amount that may be contributed as elective contributions to the safe harbor section 401(k) plan is equal to:

1. The annual limit on salary reduction contributions under a SIMPLE IRA plan for the year (taking into account catch-up contributions described in section 414(v)), multiplied by a fraction equal to the number of days the SIMPLE IRA plan was in effect for that year divided by 365, plus
2. The annual limit on elective contributions under a section 401(k) plan for the year, under section 402(g), multiplied by a fraction equal to the number of days the safe harbor plan was in effect for that year divided by 365, minus
3. Any salary reduction contributions under the SIMPLE IRA plan for the year.

(1) above specifically includes catch-up contributions under 414(v) in the calculation, whereas [2] does not. Does this mean the fraction in [2] is only taking into account the $23,000 limit, and not including the $7,500 catch-up?"

"My client is a small business. The father started the company and transferred 100% of ownership to his two sons in 2016, splitting the ownership 50/50. In 2016, the Father was 68 years old. In 2018 (or 2019), the Father started his RMDs, even though he is still employed and no longer a 5% owner. The Father is still getting RMDs but doesn't want them since he doesn't need the money.... Can we stop the RMDs since he is still employed but no longer a 5% owner? I believe he was erroneously left as an owner on the year-end questionnaire in 2016 because the previous plan admin did not understand the ramifications of not updating the ownership. I'm not sure if you can stop an RMD, once it has started, even though it was a mistake to begin with. I'm also unsure of attribution rules since his sons are now the owners."

"I sent a 5500-SF to a client for signature. I suspect the client will sign and send it back to me after 7/31 even though I instructed otherwise. I plan on filing an extension. If the client signs the 5500SF that doesn't have the 5558 box X'd in by the software, can I manually fill in the 5558 box on the 5500-SF that he signed? Or do I need to go back to him and have him sign a new 5500-SF with an X in the 5588 box generated by the software?"