…of Form 8881, Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment to claim the credits. What about businesses that will join or have joined multiple employer plans (MEPs) or Pooled Employer Plans (PEPs)? Fortunately, Section 111 of SECURE 2.0 ensures the startup tax…
…guidance: Sponsors may but are not required to include in their plan any type of Roth contribution – employee elective, employer matching, or employer nonelective. The rules currently (pre-SECURE 2.0) applicable to employee elective Roth contributions also generally apply to the new Roth employer contributions….
…the 3-year credit related to small employer startup costs for employers with no more than 50 employees from 50% to 100% of startup costs. New employer contributions credit: A new 5-year credit for matching and nonelective contributions (to qualified plans other than defined benefit (DB)…
…credit for small employers SECURE 2.0 provides a new small employer (100 employees or less) tax credit for defined contribution (DC) plans that provide that military spouses are, within two months of hire, immediately eligible for and fully vested in employer non-elective and matching contributions…
…maintained by the employer Must file a Form 5500 annually Voluntary employee deferrals Mandatory employer contributions (generally, 3% match or 2% nonelective) Immediate vesting for contribution types Additional information at IRS SIMPLE 401k facts Safe Harbor 401(k) No limit on number of employees Voluntary employee…
…highly compensated employees can’t be more than two points more than that of the non-highly compensated employees to pass this test. The ACP test – which stands for – Actual Contribution Percentage – compares employer matching contributions between these two groups. And the Top-Heavy test…
…can Redistribute the forfeited amount to the remaining eligible participants. Or they can Apply the forfeited money towards reasonable plan expenses. This reduces the employer’s out of pocket expense of maintaining the plan. Or the forfeited money can be used by the employer to reduce…
…question is “maybe.” Your client will want to discuss this question with his employer and tax advisor for a definitive answer. Generally, according to the instructions to IRS Form W-2, Wage and Tax Statement, an employer may, but is not required to, report non-Roth, after-tax…
…could be a critical notification deadline in the case of an excess deferral, depending on a plan’s terms and conditions. If a 401(k) plan participant makes salary deferrals to more than one plan of unrelated employers during the same tax year, it is possible to…
…in individual account plans like 401(k), 403(b) and governmental 457(b) plans under the following structure. Optional automatic enrollment At the employer’s discretion, automatic enrollment can apply with deferrals beginning at 3% and capped at $2,500 (or a lower amount at the employer’s discretion). The $2,500…
…must be invested in a qualified default investment alternative (QDIA) unless the participant elects otherwise. Participants can withdraw auto-deferrals made during a 90-day period after initial deferral. The provision applies to employers adopting a multiple-employer plan (MEP) after 12/29/2022, even if the MEP was established…
…an eligible employer sponsored plan at a new employer. Fiduciary/prohibited transaction issues Generally, the selection and monitoring of an automatic portability provider will be (as it is with the retention of any retirement plan service provider) a fiduciary act. The transfer by an automatic portability…