"A non-SH plan (combo with CB) HCE defers 17k over 402g limit (under age 50), 40k in total ADP testing is done using 40k, this is clear. How about ABPT testing, done on 23k or 40k (need to pass ABPT for 401a4 purposes as ratio group will not work)? The excess will be refunded sometime. Other than tax purposes, does it matter if refunded by 4/15 or later?"

"When a TPA processes distributions for a retirement plan sponsor, including federal tax withholdings and deposits and related tax filings, is it typical for the TPA to use their own EIN on the Form 1099-R and Form 945? Does it depend on whether the TPA is also the custodian and/or trustee?"

"A university erroneously sent student loan money to a student's Roth IRA account, instead of her bank account. The student has a student job at the university and contributes a small amount of her small paychecks to the Roth IRA. That's how the university has her Roth IRA account on file. The university admits it made the error by sending loan money to the IRA (they also have her personal account on file for direct deposit purposes), but states that it is unable to pull back the funds (and that its bank is unable to pull back the funds). Naturally, although the amounts were contributed as Roth IRA contributions, the university didn't tax the loan money before it was sent to the IRA provider. The entire gross loan amount was sent to the Roth IRA. The IRA provider is willing to distribute the erroneously contributed amount to the student's personal bank account as an excess contribution. My understanding from the IRA provider is that the principal distributed as the excess contribution won't be reported as taxable income to the student. However, any earnings on the principal that will be distributed will be taxable and subject to a 10% penalty. Am I missing anything for the student that might rub the IRS the wrong way? The poor kid just needs her student loan money. The university is also willing to pay any taxes that the student incurs."

"In 2018, participant rolled over $50,000 from an IRA to his 401(k) account. At the time, the recipient 401(k) plan administrator believed the rollover was from a Traditional IRA. This week, the 401(k) plan administrator learned the 2018 rollover was from a Roth IRA. The error was discovered when the participant called and asked why he didn't have a 'Roth Rollover Contribution' account balance. Answer: Because the plan believed the 2018 rollover was from a Traditional IRA. The rollover account is now worth $55,000 ($50,000 rollover contribution plus $5,000 earnings) Treas. Reg. Section 1.401(a)(31)-1, Q&A-14 requires that 'the amount of the invalid rollover contribution plus any earnings attributable thereto [be] distributed to the [participant].. .. '

"Two Questions: [1] I feel there should be guidance on how to report the distribution that will be made to the participant and I'm just not finding it. Can anyone point to any such guidance? [2] In the absence of such guidance to the contrary, does anyone see any issues with the following: (a) Distribute $55,000 to the participant. (b) The plan has no idea what portion of the $50,000 rolled over amount constituted basis in the Roth IRA (and the plan administrator is not inclined to try to find out what happened 7 years ago, and wants to give the participant the benefit of the doubt from a taxation perspective). (c) Even though the Roth dollars have been in the 401(k) plan for more than five years, and the participant is older than 59-1/2, this is not a qualified distribution because the Roth dollars should never have been in the plan in the first place. Accordingly, the plan will report the $55,000 distribution as consisting of $50,000 non-taxable basis and $5,000 as taxable earnings. (d) This is not an eligible rollover distribution. Therefore, 10% federal income will be withheld from the $5,000 taxable earnings portion of the distribution unless the participant elects a greater or smaller amount of federal income tax withholding. (e) The 1099-R will be coded as an EPCRS distribution (Code 'E') as a distribution of an excess amount.

"Any leads or thoughts would be appreciated."

"My husband passed and I have beneficiary from with my name but the plan administrator refuses to contact me or give me any info on who got paid out if it wasn’t the beneficiary or the legal living spouse. Where can I get help?"

"It is a Solo 401(k) plan. Both the husband and wife have contributed in the past, but in the past year, just the husband. The balance got over $250K so now they need a 5500-EZ. For the purposes of the form, Part II, Questions 5, what is the number of participants and active participants?"

"Business owner only contributes 5% of pay. If I do an 80% match on the first 6% of pay (plan uses Rigid Discretionary, so 6% is hard-coded), the owner gets a match of 4% of pay (80% of the 5% he contributes). There are a couple of participants who contributed 6% of pay or more. Am I prohibited from using a match of 80% of the first 6% OR a, I simply required to impose a cap on the NHCE's of 4%?"

"I have a client with a former employee who worked a half day in 2024 as a substitute. The employee was eligible and they have a safe harbor non-elective provision. The 3% contribution would be ~$15. My understanding is the letter of the law so to speak requires the $15 deposit. I have an ethical issue asking the client to make this deposit when the force out distribution will generate a fee from the record keeper (or us the TPA) that exceeds the balance of the account. Me: Client you need to make this deposit. Also Me: Thanks that is my money now as a fee. Is there a standard practice for how to handle these types of situations?"