"Owner of a 401(k) plan with over 20 ee's fails ADP Test every year. They refuse to set up a Safe Harbor plan and annually takes about $15,000 in excess contributions returned to them. I just started wondering if this is some kind of tax strategy on their part to delay some taxes? Anyone ever seen that?"

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"A large group of doctors has several doctors in their census with DOH 7/1/2024 which makes them eligible 7/1/2025 in accordance with the plan document. This was on the census file uploaded to the record keeping platform who determines eligibility. They are eligible then for SH, PS and DB. Now the plan sponsor says they didn't actually start working until mid-August and therefore should enter 1/1/2026. These doctors make the max in 6 months and so the employer contribution is large -- they maximize the K plan with SH/PS. My approach -- plan sponsor we rely on you. Tell us their DOH. I don't know if the IRS has a position on this. I advised them to keep the DOE as 7/1/2025 as that may be the expectation of these recent hires. Thoughts?"

"We have a client who has an employee who is only receiving severance payments and no other salary. I just wanted to confirm that all of that compensation is ignored, and therefore they wouldn't get any type of contribution (Profit Sharing, obviously not since they are under 1,000 hours, but a Top Heavy contribution was my only thinking)."