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Do We Still Need to Suspend Deferrals Following a Hardship Distribution?

DWC 02/25/20
Facts Larry and Kent are both participants in our company’s 401(k) plan. Both recently went back to school on a part-time basis to pursue graduate degrees and will continue working for us. Each of them took hardship distributions to help pay for tuition, Larry on September 18, 2019, and Kent on January 3, 2020. Both of them would like to resume ...
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What is a Short Plan Year and What Does It Mean for My Deferrals?

DWC 11/12/19
Facts Our company operates on a calendar tax year, but our 401(k) plan runs on a fiscal year ending each June 30th. It is a real hassle to manage two different year-ends, so we asked our TPA about aligning the two. They said we could amend the plan to make that happen, but there is also something about it creating a short year which would require ...
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Are We Still Required to Suspend Deferrals Following a Hardship Distribution?

DWC 12/11/18
Facts I sponsor a 401(k) Plan for myself and my staff. I recently processed a hardship distribution for the purchase of my primary residence in October 2018. I know the rules require me to suspend my deferral elections for six months following a hardship distribution, but I recently came across an article that said I don’t have to impose the ...
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How Do You Correct An Excess Deferral?

DWC 04/17/18
Facts Due to a glitch in our payroll system, one of the participants in our 401(k) plan contributed more than the IRS limit last year. It came to light while she was preparing her individual income tax return, and she is now asking us to return the excess amount to her?
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What Are The Different Types of 401(k) Contributions And How Do They Work?

DWC 03/27/18
Facts Our business is considering setting up a 401(k) plan for our employees. We know that it can include both employee contributions and company contributions, but we keep hearing about all sorts of other contributions. There are profit-sharing contributions, matching contributions, qualified nonelective contributions, and Roth contributions.
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Starting A New 401(k) Plan? Make Sure You Start On Time

DWC 02/13/18
Facts We are planning to establish a new 401(k) plan for our employees. Between getting set up with a recordkeeper, selecting the investment menu, working with our TPA to prepare the plan documents and getting the employees enrolled, there are a lot of moving parts to coordinate. We want to launch the plan as soon as possible, but we also don’t ...
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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.