"Husband and wife each own 50% of Company A; Husband and wife each own 22.50% of Company B. Other non-related businesses/individuals own the other 55%. Under attribution rules, each spouse owns 45.00% of Company B. That makes identical ownership between them 90% of Company B. Since their common ownership of Company A is 100%, then there is a CG between A and B. Does that sound correct? They really only own 45% of Company B and it would not seem to be logical that that there would be a CG with them really only owing 45% of Company B."

"A 401(k) has only 1 participant -- the business owner. The business owner contributed up to the 415 contribution limit in 2025 by contributing $23,500 in Deferrals and $46,500 in After Tax Employee Contributions (which were converted to In-Plan to Roth). However, the plan has a 4% Safe Match (that they fund at the end of the year), which must be funded (but the participant is already at the 415 limit). Which source should the corrective distribution be made from and using which code?"

"One-person Cash Balance Plan, end of the year valuation. Pay Credit in 2023 is $100,000. Let's assume the interest crediting rate and all segment rates are 0.00% to avoid the actuarial noise. In December 2024 the Pay Credit is amended to $125,000 effective 1/1/2024. The question is about what amount to exclude from the 50%-of-FT cushion calculation. There is no impact for the 2024 valuation, I think this is clear. For the 2025 valuation we have to exclude the $25,000 increase in FT on account of the Plan Amendment adopted within the 2-year window. I think this is pretty clear as well. But what about the 2026 valuation? Do we get to exclude $50,000 from the FT (2 years' worth of the increase in Pay Credit) or do we calculate the 50% of FT cushion without any exclusions? Aggressive me is thinking the full FT can be used since the 12/31/2026 valuation date is more than 2 years after the effective date of the amendment. The conservative me is thinking that since the FT for the 12/312026 valuation is based on the benefit accrued as of 1/1/2026 I still have to carve out the Amendment from the FT for the 50% of FT cushion piece. Thoughts?"

"I have a 401(k) Plan (for Co. A) that provides the Safe Harbor Basic Match. No problem until I found out about another company, (Co. B) that the Plan Sponsor owns 100%. Co. B does not sponsor a Plan. The owner of both Companies takes wages from both. Not an issue with my tests on Co. A but a major issue if I test Co. B on a stand alone basis due to the Owner's deferrals to the Co. A Plan. Co. B was purchased in 2022 so I am not worried about 2022 or 2023. The testing failures come into plan for 2024 and 2025. I am testing the entire controlled group as a single Plan as I do not think there is any other option unless the Owner's full deferral is returned for both of those years. We can pass 410(b) without an issue due to the number of HCE's in Co. B.

"My big question.... unless someone out there thinks my summary above is flawed, is regarding the one to one QNEC to be provided to Co. A's NHCE's. Is that allocated to those eligible for the year of the failure, 2024? Or, do I have the option of allocating the QNEC based on wages and eligibility for 2025? Also, eligibility for Profit Sharing is 1000 hours and EOY. My understanding is that the same would apply to the corrective contribution."