"IRS Notice 2024-2 provides some guidance on this. Specifically, I want to see if you disagree with my reading of Q&A L-2:

• Q. L-2: If an employee designates a matching contribution or nonelective contribution as a Roth contribution, for which taxable year is that designated Roth matching contribution or designated Roth nonelective contribution includible in the individual's gross income?
• A. L-2: A designated Roth matching contribution or designated Roth nonelective contribution is includible in an individual's gross income for the taxable year in which the contribution is allocated to the individual's account. The preceding sentence applies even if the designated Roth matching contribution or designated Roth nonelective contribution is deemed to have been made on the last day of the prior taxable year of the employer under section 404(a)(6) of the Code. It seems clear to me that the meaning of this is that 'allocated' in this context means 'contributed.'

So if in July of 2025, a profit sharing contribution is made on a Roth basis, even though it is 'allocated' for 415 purposes to the 2024 plan year, it is nevertheless TAXABLE to the employee in 2025. Any agreement/disagreement/other thoughts?"

"The employer made an excess contribution to an employee's SEP-IRA in December 2024. Per EPCRS, the financial institution returned the excess funds plus earnings to the employer in January 2025. This employee is due an RMD for 2025. For purposes of the RMD calculation, do you deem his SEP account balance to be exclusive of the erroneous allocation that was subsequently withdrawn (which I would do if this was a profit sharing account that received an incorrect deposit from the employer) or do you treat it strictly as a cash basis IRA balance as of 12/31/24? To me it's logical to adjust the balance to reflect the correct accrued benefit, but I haven't found any supporting guidance for this position."

"If as part of a severance agreement, employees are given funds to purchase COBRA, is that reportable to CMS? I understand that if a settlement, severance, etc. payment to a Medicare -- eligible individual if the payment relates to past or future medical expenses, but if the settlement just includes funds to use for COBRA (we don't know whether they actually purchased COBRA or not), do we have to report?"

"[1] If there are only $76,000 IN ASSETS, in a VEBA plan. that has not had a contribution for at least 15 years, and all participants in the plan were terminated 10 years ago at least, still required to file a 990-EZ, since assets for all plans for this entity are under 250K? Also, in general is a 990 still required to be filed for VEBA plans or a 5500 SF is sufficient? [2] IF YES, must the 990 be e-filed, and mailing it in is not allowed anymore? [3] Can this VEBA plsn merged with a MP plan of the same entity (with of course properly allocating, ie prorating, the assets for each of the 2 plans annually)?"

"I saw a communication from a record keeper which provided a discretionary match participant notice template. It seems to imply that a notice is required when any discretionary match has been funded. My understanding has been that this notice, due 60 days following the final funding of the match for a plan year, is only needed if the match was a 'flexible' discretionary match and that this notice is not needed for a 'rigid' discretionary match. Did I miss a change in the notification requirement?"

"A company failed to process participants' after-tax elections during January 2024. Company corrected by depositing a 40% QNEC early in 2024. Then a handful of participants proceeded to max out their contributions, exceeding the 415(c) limit. (Basically, client let contributions continue in 2024 as if QNEC had never been made; it wasn't factored in when applying the 415(c) limit.) Essentially, the participants would not have been owed anything if the company had waited to correct because those participants ultimately hit the 415(c) limit. Is it appropriate to forfeit money out of the QNEC source, with the view that the correction was never required? Or do they have to fix the 415(c) limit issue by distributing the after-tax contributions?"