"Participant terminated employment in 2022. Employer did not make the 2022 contribution until 9/2023 (terminated participant did not receive her contribution). I revised the 2022 valuation to include terminated participant's share of the 2022 contribution, plus share of 2023 earnings. It is now 2024, participant wants a cash distribution. I understand that 20% must be withheld from distribution. Do I use 2023 945 to forward taxes to IRS or wait for the 2024 forms. Is it too late to do 2023 1099R? Or is there another way to handle this situation."

"Under our cash balance plan, a contribution doesn't receive interest until February of the following plan year. For example, a 2023 contribution will start to receive interest credit in February of 2024. We would like to amend the plan to eliminate the 1 month delay and have contributions receive the interest credit starting on January 1 of the following plan year. Would it be permissible to make this amendment retroactively effective to January 1, 2024?"

"Have a real saver of an employee who has no ownership in the company sponsoring the 401(k) plan that she is a participant in. This is a valued employee so she is an HCE. She has a substantial amount in an IRA and was thinking of rolling her IRA into the 401(k) plan to avoid having to take RMDs. She is currently 69 and is looking ahead. Anything wrong with rolling over the IRA now with the idea that she will not need to take RMDs until she actually retires, which she claims will be at least 10 years?"

"Suppose you have a traditional 401(k) plan with about 20 participants. The plan document specifically states that salary deferral contributions in excess of 40% of Compensation are not permitted. In 2023 they had a participant with lower salary that funded salary deferrals of 70% of compensation. Since this is a violation of the plan I would think the extra 30% needs to be removed from the plan and refunded to the participant. Would the full 70% be included in the ADP test? I would think not because the plan specifically prohibits salary deferrals in excess of 40%. Does anyone agree / disagree?"

"So, the wording in IRS Notice 2004-2, Q&A L-2, and similarly in Q&A L-9, seem to contemplate the taxable year when 'allocated' in a different manner than the normal interpretation of 'allocation' for valuation, deduction, and 415 purposes. In this case, 'allocation' seems to be synonymous with 'deposited' or 'contributed.' Which makes sense -- since it has to be reported on a 1099, how could it be done otherwise if the employer went on extension, and the employer contribution wasn't made until September, for example? Any other thoughts on this?

' 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.' "

"Here is a new one for me. Told the active client RMD was 3k/month for 9 months (first year) but took 10. There is no in-service allowed under the plan document. Is this something that can be corrected under SCP? There was no withholding nor spouse consent done as I just found out and was never told about this. I know it is a small amount but I still want to make sure all ducks are in a row."