Filing Your Taxes Online is Fast, Easy and Secure.
Start now and receive your tax refund in as little as 7 days.

1. Get Answers

Your online questions are customized to your unique tax situation.

2. Maximize your Refund

Find tax credits for everything from school tuition to buying a hybri

3. E-File for FREE

E-file free with direct deposit to get your refund in as few as 7 days.

Filing your taxes with paper mail can be difficult and it could take weeks for your refund to arrive. IRS e-file is easy, fast and secure. There is no paperwork going to the IRS so tax refunds can be processed in as little as 7 days with direct deposit. As you prepare your taxes online, you can see your tax refund in real time.

FREE audit support and representation from an enrolled agent – NEW and only from H&R Block

Irs Amended Return Form

Amended Tax Return FormsHow To Amend A Tax ReturnFree Tax HelpCan I Do My State Taxes Online For Free1040ezFile 2012 Taxes TurbotaxFile 2010 Tax Return Online FreeTax Forms 2012Student Tax ReturnsFile State Return OnlyHow Do I File An Amended Tax ReturnFree Income Tax Service1040nr Ez 2013Student Tax ReturnWww Taxact ComH&r Block At Home FreeH&r Block OnlineHow Do I File A 1040xLast Day File Taxes 20132012 E File Tax ReturnNeed File 2010 TaxesFederal Tax Forms And State FormsAmending Tax ReturnsFree Turbo Tax For Low Income1040nr Online Filing Free1040ez Tax Forms 2011Tax Credits For UnemployedI Need To Amend My TaxesFile Your State Taxes Online For FreeWww Irs Gov 1040x1040nr EfileFile State Tax Return Online2006 Income Tax FormsFile Taxes For FreeTurbotax Login Tax Return 20121040 Ez Tax FormIrs Form 1040x 2013 Tax ReturnHow To Amend State Tax ReturnSchool Tax FormsWww Irs Gov Freefile

Irs Amended Return Form

Irs amended return form 2. Irs amended return form   The Tax and Filing Requirements Table of Contents Returns and Filing Requirements Payment of TaxFederal Tax Deposits Must be Made by Electronic Funds Transfer All organizations subject to the tax on unrelated business income, except the exempt trusts described in section 511(b)(2), are taxable at corporate rates on that income. Irs amended return form All exempt trusts subject to the tax on unrelated business income that, if not exempt, would be taxable as trusts are taxable at trust rates on that income. Irs amended return form However, an exempt trust may not claim the deduction for a personal exemption that is normally allowed to a trust. Irs amended return form The tax is imposed on the organization's unrelated business taxable income (described in chapter 4). Irs amended return form The tax is reduced by any applicable tax credits, including the general business credits (such as the investment credit) and the foreign tax credit. Irs amended return form Alternative minimum tax. Irs amended return form   Organizations liable for tax on unrelated business income may be liable for alternative minimum tax on certain adjustments and tax preference items. Irs amended return form Returns and Filing Requirements An exempt organization subject to the tax on unrelated business income must file Form 990-T and attach any required supporting schedules and forms. Irs amended return form The obligation to file Form 990-T is in addition to the obligation to file any other required returns. Irs amended return form Form 990-T is required if the organization's gross income from unrelated businesses is $1,000 or more. Irs amended return form An exempt organization must report income from all its unrelated businesses on a single Form 990-T. Irs amended return form Each organization must file a separate Form 990-T, except section 501(c)(2) title holding corporations and organizations receiving their earnings that file a consolidated return under section 1501. Irs amended return form The various provisions of tax law relating to accounting periods, accounting methods, at-risk limits (described in section 465), assessments, and collection penalties that apply to tax returns generally also apply to Form 990-T. Irs amended return form When to file. Irs amended return form   The Form 990-T of an employees' trust described in section 401(a), an IRA (including a traditional, SEP, SIMPLE, Roth, or Coverdell IRA), or an MSA must be filed by the 15th day of the 4th month after the end of its tax year. Irs amended return form The Form 990-T of any other exempt organization must be filed by the 15th day of the 5th month after the end of its tax year. Irs amended return form If the due date falls on a Saturday, Sunday, or legal holiday, the return is due by the next business day. Irs amended return form Extension of time to file. Irs amended return form   A Form 990-T filer may request an automatic 3-month (6 months for corporation) extension of time to file a return by submitting Form 8868, Application for Extension of Time To File an Exempt Organization Return. Irs amended return form The Form 990-T filer may also use Form 8868 to apply for an additional (not automatic) 3-month extension to file the return if the original 3-month extension was not enough time. Irs amended return form Public Inspection Requirements of Section 501(c)(3) Organizations. Irs amended return form   Under section 6104(d), a section 501(c)(3) organization that has gross income from an unrelated trade or business of $1,000 or more must make its annual exempt organization business income tax return (including amended returns) available for public inspection. Irs amended return form    A section 501(c)(3) organization filing the Form 990-T only to request a credit for certain federal excise taxes paid does not have to make the Form 990-T available for public inspection. Irs amended return form Payment of Tax Estimated tax. Irs amended return form   A tax-exempt organization must make estimated tax payments if it expects its tax (unrelated business income tax after certain adjustments) to be $500 or more. Irs amended return form Estimated tax payments are generally due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. Irs amended return form If any due date falls on a Saturday, Sunday, or legal holiday, the payment is due on the next business day. Irs amended return form   Any organization that fails to pay the proper estimated tax when due may be charged an underpayment penalty for the period of underpayment. Irs amended return form Generally, to avoid the estimated tax penalty, the organization must make estimated tax payments that total 100% of the organization's current tax year liability. Irs amended return form However, an organization can base its required estimated tax payments on 100% of the tax shown on its return for the preceding year (unless no tax is shown) if its taxable income for each of the 3 preceding tax years was less than $1 million. Irs amended return form If an organization's taxable income for any of those years was $1 million or more, it can base only its first required installment payment on its last year's tax. Irs amended return form   All tax-exempt organizations should use Form 990-W (Worksheet), to figure their estimated tax. Irs amended return form    Tax due with Form 990-T. Irs amended return form   Any tax due with Form 990-T must be paid in full when the return is filed, but no later than the date the return is due (determined without extensions). Irs amended return form Federal Tax Deposits Must be Made by Electronic Funds Transfer You must use electronic funds transfer to make all federal deposits (such as deposits of estimated tax, employment tax, and excise tax). Irs amended return form Forms 8109 and 8109-B, Federal Tax Deposit Coupon, are no longer in use. Irs amended return form Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Irs amended return form If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. Irs amended return form Also, you may arrange for your financial institution to initiate a same-day wire payment on your behalf. Irs amended return form EFTPS is a free service provided by the Department of Treasury. Irs amended return form Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. Irs amended return form To get more information about EFTPS or to enroll in EFTPS, visit www. Irs amended return form eftps. Irs amended return form gov or call 1-800-555-4477. Irs amended return form Additional information about EFTPS is available in Publication 966, The Secure Way to Pay Your Federal Taxes. Irs amended return form Deposits on business days only. Irs amended return form   If a deposit is required to be made on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. Irs amended return form A business day is any day other than a Saturday, Sunday, or legal holiday. Irs amended return form For example, if a deposit is required to be made on a Friday and Friday is a legal holiday, the deposit will be considered timely if it is made by the following Monday (if that Monday is a business day). Irs amended return form The term "legal holiday" means any legal holiday in the District of Columbia. Irs amended return form Prev  Up  Next   Home   More Online Publications
Español

Prescription Drugs

Look up drug interactions, see images of prescription medications, and get information about drug coverage.

The Irs Amended Return Form

Irs amended return form 4. Irs amended return form   Qualified Plans Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: Kinds of PlansDefined Contribution Plan Defined Benefit Plan Qualification RulesEarly retirement. Irs amended return form Loan secured by benefits. Irs amended return form Waiver of survivor benefits. Irs amended return form Waiver of 30-day waiting period before annuity starting date. Irs amended return form Involuntary cash-out of benefits not more than dollar limit. Irs amended return form Exception for certain loans. Irs amended return form Exception for QDRO. Irs amended return form SIMPLE and safe harbor 401(k) plan exception. Irs amended return form Setting Up a Qualified PlanAdopting a Written Plan Investing Plan Assets Minimum Funding RequirementDue dates. Irs amended return form Installment percentage. Irs amended return form Extended period for making contributions. Irs amended return form ContributionsEmployer Contributions Employee Contributions When Contributions Are Considered Made Employer DeductionDeduction Limits Deduction Limit for Self-Employed Individuals Where To Deduct Contributions Carryover of Excess Contributions Excise Tax for Nondeductible (Excess) Contributions Elective Deferrals (401(k) Plans)Limit on Elective Deferrals Automatic Enrollment Treatment of Excess Deferrals Qualified Roth Contribution ProgramElective Deferrals Qualified Distributions Reporting Requirements DistributionsRequired Distributions Distributions From 401(k) Plans Tax Treatment of Distributions Tax on Early Distributions Tax on Excess Benefits Excise Tax on Reversion of Plan Assets Notification of Significant Benefit Accrual Reduction Prohibited TransactionsTax on Prohibited Transactions Reporting RequirementsOne-participant plan. Irs amended return form Caution: Form 5500-EZ not required. Irs amended return form Form 5500. Irs amended return form Electronic filing of Forms 5500 and 5500-SF. Irs amended return form Topics - This chapter discusses: Kinds of plans Qualification rules Setting up a qualified plan Minimum funding requirement Contributions Employer deduction Elective deferrals (401(k) plans) Qualified Roth contribution program Distributions Prohibited transactions Reporting requirements Useful Items - You may want to see: Publications 575 Pension and Annuity Income 590 Individual Retirement Arrangements (IRAs) 3066 Have you had your Check-up this year? for Retirement Plans 3998 Choosing A Retirement Solution for Your Small Business 4222 401(k) Plans for Small Businesses 4530 Designated Roth Accounts under a 401(k), 403(b), or governmental 457(b) plans 4531 401(k) Plan Checklist 4674 Automatic Enrollment 401(k) Plans for Small Businesses 4806 Profit Sharing Plans for Small Businesses Forms (and Instructions) www. Irs amended return form dol. Irs amended return form gov/ebsa/pdf/2013-5500. Irs amended return form pdf www. Irs amended return form dol. Irs amended return form gov/ebsa/pdf/2013-5500-SF. Irs amended return form pdf W-2 Wage and Tax Statement Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Irs amended return form 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Irs amended return form 1040 U. Irs amended return form S. Irs amended return form Individual Income Tax Return Schedule C (Form 1040) Profit or Loss From Business Schedule F (Form 1040) Profit or Loss From Farming 5300 Application for Determination for Employee Benefit Plan 5310 Application for Determination for Terminating Plan 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 5330 Return of Excise Taxes Related to Employee Benefit Plans 5500 Annual Return/Report of Employee Benefit Plan. Irs amended return form For copies of this form, go to: 5500-EZ Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan. Irs amended return form For copies of this form, go to: 8717 User Fee for Employee Plan Determination Letter Request 8880 Credit for Qualified Retirement Savings Contributions 8881 Credit for Small Employer Pension Plan Startup Costs 8955-SSA Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits These qualified retirement plans set up by self-employed individuals are sometimes called Keogh or H. Irs amended return form R. Irs amended return form 10 plans. Irs amended return form A sole proprietor or a partnership can set up one of these plans. Irs amended return form A common-law employee or a partner cannot set up one of these plans. Irs amended return form The plans described here can also be set up and maintained by employers that are corporations. Irs amended return form All the rules discussed here apply to corporations except where specifically limited to the self-employed. Irs amended return form The plan must be for the exclusive benefit of employees or their beneficiaries. Irs amended return form These qualified plans can include coverage for a self-employed individual. Irs amended return form As an employer, you can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Irs amended return form The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Irs amended return form Kinds of Plans There are two basic kinds of qualified plans—defined contribution plans and defined benefit plans—and different rules apply to each. Irs amended return form You can have more than one qualified plan, but your contributions to all the plans must not total more than the overall limits discussed under Contributions and Employer Deduction, later. Irs amended return form Defined Contribution Plan A defined contribution plan provides an individual account for each participant in the plan. Irs amended return form It provides benefits to a participant largely based on the amount contributed to that participant's account. Irs amended return form Benefits are also affected by any income, expenses, gains, losses, and forfeitures of other accounts that may be allocated to an account. Irs amended return form A defined contribution plan can be either a profit-sharing plan or a money purchase pension plan. Irs amended return form Profit-sharing plan. Irs amended return form   Although it is called a “profit-sharing plan,” you do not actually have to make a business profit for the year in order to make a contribution (except for yourself if you are self-employed as discussed under Self-employed Individual, later). Irs amended return form A profit-sharing plan can be set up to allow for discretionary employer contributions, meaning the amount contributed each year to the plan is not fixed. Irs amended return form An employer may even make no contribution to the plan for a given year. Irs amended return form   The plan must provide a definite formula for allocating the contribution among the participants and for distributing the accumulated funds to the employees after they reach a certain age, after a fixed number of years, or upon certain other occurrences. Irs amended return form   In general, you can be more flexible in making contributions to a profit-sharing plan than to a money purchase pension plan (discussed next) or a defined benefit plan (discussed later). Irs amended return form Money purchase pension plan. Irs amended return form   Contributions to a money purchase pension plan are fixed and are not based on your business profits. Irs amended return form For example, if the plan requires that contributions be 10% of the participants' compensation without regard to whether you have profits (or the self-employed person has earned income), the plan is a money purchase pension plan. Irs amended return form This applies even though the compensation of a self-employed individual as a participant is based on earned income derived from business profits. Irs amended return form Defined Benefit Plan A defined benefit plan is any plan that is not a defined contribution plan. Irs amended return form Contributions to a defined benefit plan are based on what is needed to provide definitely determinable benefits to plan participants. Irs amended return form Actuarial assumptions and computations are required to figure these contributions. Irs amended return form Generally, you will need continuing professional help to have a defined benefit plan. Irs amended return form Qualification Rules To qualify for the tax benefits available to qualified plans, a plan must meet certain requirements (qualification rules) of the tax law. Irs amended return form Generally, unless you write your own plan, the financial institution that provided your plan will take the continuing responsibility for meeting qualification rules that are later changed. Irs amended return form The following is a brief overview of important qualification rules that generally have not yet been discussed. Irs amended return form It is not intended to be all-inclusive. Irs amended return form See Setting Up a Qualified Plan , later. Irs amended return form Generally, the following qualification rules also apply to a SIMPLE 401(k) retirement plan. Irs amended return form A SIMPLE 401(k) plan is, however, not subject to the top-heavy plan rules and nondiscrimination rules if the plan satisfies the provisions discussed in chapter 3 under SIMPLE 401(k) Plan. Irs amended return form Plan assets must not be diverted. Irs amended return form   Your plan must make it impossible for its assets to be used for, or diverted to, purposes other than the benefit of employees and their beneficiaries. Irs amended return form As a general rule, the assets cannot be diverted to the employer. Irs amended return form Minimum coverage requirement must be met. Irs amended return form   To be a qualified plan, a defined benefit plan must benefit at least the lesser of the following. Irs amended return form 50 employees, or The greater of: 40% of all employees, or Two employees. Irs amended return form If there is only one employee, the plan must benefit that employee. Irs amended return form Contributions or benefits must not discriminate. Irs amended return form   Under the plan, contributions or benefits to be provided must not discriminate in favor of highly compensated employees. Irs amended return form Contributions and benefits must not be more than certain limits. Irs amended return form   Your plan must not provide for contributions or benefits that are more than certain limits. Irs amended return form The limits apply to the annual contributions and other additions to the account of a participant in a defined contribution plan and to the annual benefit payable to a participant in a defined benefit plan. Irs amended return form These limits are discussed later in this chapter under Contributions. Irs amended return form Minimum vesting standard must be met. Irs amended return form   Your plan must satisfy certain requirements regarding when benefits vest. Irs amended return form A benefit is vested (you have a fixed right to it) when it becomes nonforfeitable. Irs amended return form A benefit is nonforfeitable if it cannot be lost upon the happening, or failure to happen, of any event. Irs amended return form Special rules apply to forfeited benefit amounts. Irs amended return form In defined contribution plans, forfeitures can be allocated to the accounts of remaining participants in a nondiscriminatory way, or they can be used to reduce your contributions. Irs amended return form   Forfeitures under a defined benefit plan cannot be used to increase the benefits any employee would otherwise receive under the plan. Irs amended return form Forfeitures must be used instead to reduce employer contributions. Irs amended return form Participation. Irs amended return form   In general, an employee must be allowed to participate in your plan if he or she meets both the following requirements. Irs amended return form Has reached age 21. Irs amended return form Has at least 1 year of service (2 years if the plan is not a 401(k) plan and provides that after not more than 2 years of service the employee has a nonforfeitable right to all his or her accrued benefit). Irs amended return form A plan cannot exclude an employee because he or she has reached a specified age. Irs amended return form Leased employee. Irs amended return form   A leased employee, defined in chapter 1, who performs services for you (recipient of the services) is treated as your employee for certain plan qualification rules. Irs amended return form These rules include those in all the following areas. Irs amended return form Nondiscrimination in coverage, contributions, and benefits. Irs amended return form Minimum age and service requirements. Irs amended return form Vesting. Irs amended return form Limits on contributions and benefits. Irs amended return form Top-heavy plan requirements. Irs amended return form Contributions or benefits provided by the leasing organization for services performed for you are treated as provided by you. Irs amended return form Benefit payment must begin when required. Irs amended return form   Your plan must provide that, unless the participant chooses otherwise, the payment of benefits to the participant must begin within 60 days after the close of the latest of the following periods. Irs amended return form The plan year in which the participant reaches the earlier of age 65 or the normal retirement age specified in the plan. Irs amended return form The plan year in which the 10th anniversary of the year in which the participant began participating in the plan occurs. Irs amended return form The plan year in which the participant separates from service. Irs amended return form Early retirement. Irs amended return form   Your plan can provide for payment of retirement benefits before the normal retirement age. Irs amended return form If your plan offers an early retirement benefit, a participant who separates from service before satisfying the early retirement age requirement is entitled to that benefit if he or she meets both the following requirements. Irs amended return form Satisfies the service requirement for the early retirement benefit. Irs amended return form Separates from service with a nonforfeitable right to an accrued benefit. Irs amended return form The benefit, which may be actuarially reduced, is payable when the early retirement age requirement is met. Irs amended return form Required minimum distributions. Irs amended return form   Special rules require minimum annual distributions from qualified plans, generally beginning after age  70½. Irs amended return form See Required Distributions , under Distributions, later. Irs amended return form Survivor benefits. Irs amended return form   Defined benefit and money purchase pension plans must provide automatic survivor benefits in both the following forms. Irs amended return form A qualified joint and survivor annuity for a vested participant who does not die before the annuity starting date. Irs amended return form A qualified pre-retirement survivor annuity for a vested participant who dies before the annuity starting date and who has a surviving spouse. Irs amended return form   The automatic survivor benefit also applies to any participant under a profit-sharing plan unless all the following conditions are met. Irs amended return form The participant does not choose benefits in the form of a life annuity. Irs amended return form The plan pays the full vested account balance to the participant's surviving spouse (or other beneficiary if the surviving spouse consents or if there is no surviving spouse) if the participant dies. Irs amended return form The plan is not a direct or indirect transferee of a plan that must provide automatic survivor benefits. Irs amended return form Loan secured by benefits. Irs amended return form   If automatic survivor benefits are required for a spouse under a plan, he or she must consent to a loan that uses as security the accrued benefits in the plan. Irs amended return form Waiver of survivor benefits. Irs amended return form   Each plan participant may be permitted to waive the joint and survivor annuity or the pre-retirement survivor annuity (or both), but only if the participant has the written consent of the spouse. Irs amended return form The plan also must allow the participant to withdraw the waiver. Irs amended return form The spouse's consent must be witnessed by a plan representative or notary public. Irs amended return form Waiver of 30-day waiting period before annuity starting date. Irs amended return form    A plan may permit a participant to waive (with spousal consent) the 30-day minimum waiting period after a written explanation of the terms and conditions of a joint and survivor annuity is provided to each participant. Irs amended return form   The waiver is allowed only if the distribution begins more than 7 days after the written explanation is provided. Irs amended return form Involuntary cash-out of benefits not more than dollar limit. Irs amended return form   A plan may provide for the immediate distribution of the participant's benefit under the plan if the present value of the benefit is not greater than $5,000. Irs amended return form   However, the distribution cannot be made after the annuity starting date unless the participant and the spouse or surviving spouse of a participant who died (if automatic survivor benefits are required for a spouse under the plan) consents in writing to the distribution. Irs amended return form If the present value is greater than $5,000, the plan must have the written consent of the participant and the spouse or surviving spouse (if automatic survivor benefits are required for a spouse under the plan) for any immediate distribution of the benefit. Irs amended return form   Benefits attributable to rollover contributions and earnings on them can be ignored in determining the present value of these benefits. Irs amended return form   A plan must provide for the automatic rollover of any cash-out distribution of more than $1,000 to an individual retirement account or annuity, unless the participant chooses otherwise. Irs amended return form A section 402(f) notice must be sent prior to an involuntary cash-out of an eligible rollover distribution. Irs amended return form See Section 402(f) Notice under Distributions, later, for more details. Irs amended return form Consolidation, merger, or transfer of assets or liabilities. Irs amended return form   Your plan must provide that, in the case of any merger or consolidation with, or transfer of assets or liabilities to, any other plan, each participant would (if the plan then terminated) receive a benefit equal to or more than the benefit he or she would have been entitled to just before the merger, etc. Irs amended return form (if the plan had then terminated). Irs amended return form Benefits must not be assigned or alienated. Irs amended return form   Your plan must provide that a participant's or beneficiary's benefits under the plan cannot be taken away by any legal or equitable proceeding except as provided below or pursuant to certain judgements or settlements against the participant for violations of plan rules. Irs amended return form Exception for certain loans. Irs amended return form   A loan from the plan (not from a third party) to a participant or beneficiary is not treated as an assignment or alienation if the loan is secured by the participant's accrued nonforfeitable benefit and is exempt from the tax on prohibited transactions under section 4975(d)(1) or would be exempt if the participant were a disqualified person. Irs amended return form A disqualified person is defined later in this chapter under Prohibited Transactions. Irs amended return form Exception for QDRO. Irs amended return form   Compliance with a QDRO (qualified domestic relations order) does not result in a prohibited assignment or alienation of benefits. Irs amended return form   Payments to an alternate payee under a QDRO before the participant attains age 59½ are not subject to the 10% additional tax that would otherwise apply under certain circumstances. Irs amended return form Benefits distributed to an alternate payee under a QDRO can be rolled over tax free to an individual retirement account or to an individual retirement annuity. Irs amended return form No benefit reduction for social security increases. Irs amended return form   Your plan must not permit a benefit reduction for a post-separation increase in the social security benefit level or wage base for any participant or beneficiary who is receiving benefits under your plan, or who is separated from service and has nonforfeitable rights to benefits. Irs amended return form This rule also applies to plans supplementing the benefits provided by other federal or state laws. Irs amended return form Elective deferrals must be limited. Irs amended return form   If your plan provides for elective deferrals, it must limit those deferrals to the amount in effect for that particular year. Irs amended return form See Limit on Elective Deferrals later in this chapter. Irs amended return form Top-heavy plan requirements. Irs amended return form   A top-heavy plan is one that mainly favors partners, sole proprietors, and other key employees. Irs amended return form   A plan is top-heavy for a plan year if, for the preceding plan year, the total value of accrued benefits or account balances of key employees is more than 60% of the total value of accrued benefits or account balances of all employees. Irs amended return form Additional requirements apply to a top-heavy plan primarily to provide minimum benefits or contributions for non-key employees covered by the plan. Irs amended return form   Most qualified plans, whether or not top-heavy, must contain provisions that meet the top-heavy requirements and will take effect in plan years in which the plans are top-heavy. Irs amended return form These qualification requirements for top-heavy plans are explained in section 416 and its regulations. Irs amended return form SIMPLE and safe harbor 401(k) plan exception. Irs amended return form   The top-heavy plan requirements do not apply to SIMPLE 401(k) plans, discussed earlier in chapter 3, or to safe harbor 401(k) plans that consist solely of safe harbor contributions, discussed later in this chapter. Irs amended return form QACAs (discussed later) also are not subject to top-heavy requirements. Irs amended return form Setting Up a Qualified Plan There are two basic steps in setting up a qualified plan. Irs amended return form First you adopt a written plan. Irs amended return form Then you invest the plan assets. Irs amended return form You, the employer, are responsible for setting up and maintaining the plan. Irs amended return form If you are self-employed, it is not necessary to have employees besides yourself to sponsor and set up a qualified plan. Irs amended return form If you have employees, see Participation, under Qualification Rules, earlier. Irs amended return form Set-up deadline. Irs amended return form   To take a deduction for contributions for a tax year, your plan must be set up (adopted) by the last day of that year (December 31 for calendar-year employers). Irs amended return form Credit for startup costs. Irs amended return form   You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a qualified plan that first became effective in 2013. Irs amended return form For more information, see Credit for startup costs under Reminders, earlier. Irs amended return form Adopting a Written Plan You must adopt a written plan. Irs amended return form The plan can be an IRS-approved master or prototype plan offered by a sponsoring organization. Irs amended return form Or it can be an individually designed plan. Irs amended return form Written plan requirement. Irs amended return form   To qualify, the plan you set up must be in writing and must be communicated to your employees. Irs amended return form The plan's provisions must be stated in the plan. Irs amended return form It is not sufficient for the plan to merely refer to a requirement of the Internal Revenue Code. Irs amended return form Master or prototype plans. Irs amended return form   Most qualified plans follow a standard form of plan (a master or prototype plan) approved by the IRS. Irs amended return form Master and prototype plans are plans made available by plan providers for adoption by employers (including self-employed individuals). Irs amended return form Under a master plan, a single trust or custodial account is established, as part of the plan, for the joint use of all adopting employers. Irs amended return form Under a prototype plan, a separate trust or custodial account is established for each employer. Irs amended return form Plan providers. Irs amended return form   The following organizations generally can provide IRS-approved master or prototype plans. Irs amended return form Banks (including some savings and loan associations and federally insured credit unions). Irs amended return form Trade or professional organizations. Irs amended return form Insurance companies. Irs amended return form Mutual funds. Irs amended return form Individually designed plan. Irs amended return form   If you prefer, you can set up an individually designed plan to meet specific needs. Irs amended return form Although advance IRS approval is not required, you can apply for approval by paying a fee and requesting a determination letter. Irs amended return form You may need professional help for this. Irs amended return form See Rev. Irs amended return form Proc. Irs amended return form 2014-6, 2014-1 I. Irs amended return form R. Irs amended return form B. Irs amended return form 198, available at www. Irs amended return form irs. Irs amended return form gov/irb/2014-1_IRB/ar10. Irs amended return form html, as annually updated, that may help you decide whether to apply for approval. Irs amended return form Internal Revenue Bulletins are available on the IRS website at IRS. Irs amended return form gov They are also available at most IRS offices and at certain libraries. Irs amended return form User fee. Irs amended return form   The fee mentioned earlier for requesting a determination letter does not apply to employers who have 100 or fewer employees who received at least $5,000 of compensation from the employer for the preceding year. Irs amended return form At least one of them must be a non-highly compensated employee participating in the plan. Irs amended return form The fee does not apply to requests made by the later of the following dates. Irs amended return form The end of the 5th plan year the plan is in effect. Irs amended return form The end of any remedial amendment period for the plan that begins within the first 5 plan years. Irs amended return form The request cannot be made by the sponsor of a prototype or similar plan the sponsor intends to market to participating employers. Irs amended return form   For more information about whether the user fee applies, see Rev. Irs amended return form Proc. Irs amended return form 2014-8, 2014-1 I. Irs amended return form R. Irs amended return form B. Irs amended return form 242, available at www. Irs amended return form irs. Irs amended return form gov/irb/2014-1_IRB/ar12. Irs amended return form html, as may be annually updated; Notice 2003-49, 2003-32 I. Irs amended return form R. Irs amended return form B. Irs amended return form 294, available at www. Irs amended return form irs. Irs amended return form gov/irb/2003-32_IRB/ar13. Irs amended return form html; and Notice 2011-86, 2011-45 I. Irs amended return form R. Irs amended return form B. Irs amended return form 698, available at www. Irs amended return form irs. Irs amended return form gov/irb/2011-45_IRB/ar11. Irs amended return form html. Irs amended return form Investing Plan Assets In setting up a qualified plan, you arrange how the plan's funds will be used to build its assets. Irs amended return form You can establish a trust or custodial account to invest the funds. Irs amended return form You, the trust, or the custodial account can buy an annuity contract from an insurance company. Irs amended return form Life insurance can be included only if it is incidental to the retirement benefits. Irs amended return form You set up a trust by a legal instrument (written document). Irs amended return form You may need professional help to do this. Irs amended return form You can set up a custodial account with a bank, savings and loan association, credit union, or other person who can act as the plan trustee. Irs amended return form You do not need a trust or custodial account, although you can have one, to invest the plan's funds in annuity contracts or face-amount certificates. Irs amended return form If anyone other than a trustee holds them, however, the contracts or certificates must state they are not transferable. Irs amended return form Other plan requirements. Irs amended return form   For information on other important plan requirements, see Qualification Rules , earlier in this chapter. Irs amended return form Minimum Funding Requirement In general, if your plan is a money purchase pension plan or a defined benefit plan, you must actually pay enough into the plan to satisfy the minimum funding standard for each year. Irs amended return form Determining the amount needed to satisfy the minimum funding standard for a defined benefit plan is complicated, and you should seek professional help in order to meet these contribution requirements. Irs amended return form For information on this funding requirement, see section 412 and its regulations. Irs amended return form Quarterly installments of required contributions. Irs amended return form   If your plan is a defined benefit plan subject to the minimum funding requirements, you generally must make quarterly installment payments of the required contributions. Irs amended return form If you do not pay the full installments timely, you may have to pay interest on any underpayment for the period of the underpayment. Irs amended return form Due dates. Irs amended return form   The due dates for the installments are 15 days after the end of each quarter. Irs amended return form For a calendar-year plan, the installments are due April 15, July 15, October 15, and January 15 (of the following year). Irs amended return form Installment percentage. Irs amended return form   Each quarterly installment must be 25% of the required annual payment. Irs amended return form Extended period for making contributions. Irs amended return form   Additional contributions required to satisfy the minimum funding requirement for a plan year will be considered timely if made by 8½ months after the end of that year. Irs amended return form Contributions A qualified plan is generally funded by your contributions. Irs amended return form However, employees participating in the plan may be permitted to make contributions, and you may be permitted to make contributions on your own behalf. Irs amended return form See Employee Contributions and Elective Deferrals later. Irs amended return form Contributions deadline. Irs amended return form   You can make deductible contributions for a tax year up to the due date of your return (plus extensions) for that year. Irs amended return form Self-employed individual. Irs amended return form   You can make contributions on behalf of yourself only if you have net earnings (compensation) from self-employment in the trade or business for which the plan was set up. Irs amended return form Your net earnings must be from your personal services, not from your investments. Irs amended return form If you have a net loss from self-employment, you cannot make contributions for yourself for the year, even if you can contribute for common-law employees based on their compensation. Irs amended return form Employer Contributions There are certain limits on the contributions and other annual additions you can make each year for plan participants. Irs amended return form There are also limits on the amount you can deduct. Irs amended return form See Deduction Limits , later. Irs amended return form Limits on Contributions and Benefits Your plan must provide that contributions or benefits cannot exceed certain limits. Irs amended return form The limits differ depending on whether your plan is a defined contribution plan or a defined benefit plan. Irs amended return form Defined benefit plan. Irs amended return form   For 2013, the annual benefit for a participant under a defined benefit plan cannot exceed the lesser of the following amounts. Irs amended return form 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. Irs amended return form $205,000 ($210,000 for 2014). Irs amended return form Defined contribution plan. Irs amended return form   For 2013, a defined contribution plan's annual contributions and other additions (excluding earnings) to the account of a participant cannot exceed the lesser of the following amounts. Irs amended return form 100% of the participant's compensation. Irs amended return form $51,000 ($52,000 for 2014). Irs amended return form   Catch-up contributions (discussed later under Limit on Elective Deferrals) are not subject to the above limit. Irs amended return form Employee Contributions Participants may be permitted to make nondeductible contributions to a plan in addition to your contributions. Irs amended return form Even though these employee contributions are not deductible, the earnings on them are tax free until distributed in later years. Irs amended return form Also, these contributions must satisfy the actual contribution percentage (ACP) test of section 401(m)(2), a nondiscrimination test that applies to employee contributions and matching contributions. Irs amended return form See Regulations sections 1. Irs amended return form 401(k)-2 and 1. Irs amended return form 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Irs amended return form When Contributions Are Considered Made You generally apply your plan contributions to the year in which you make them. Irs amended return form But you can apply them to the previous year if all the following requirements are met. Irs amended return form You make them by the due date of your tax return for the previous year (plus extensions). Irs amended return form The plan was established by the end of the previous year. Irs amended return form The plan treats the contributions as though it had received them on the last day of the previous year. Irs amended return form You do either of the following. Irs amended return form You specify in writing to the plan administrator or trustee that the contributions apply to the previous year. Irs amended return form You deduct the contributions on your tax return for the previous year. Irs amended return form A partnership shows contributions for partners on Form 1065. Irs amended return form Employer's promissory note. Irs amended return form   Your promissory note made out to the plan is not a payment that qualifies for the deduction. Irs amended return form Also, issuing this note is a prohibited transaction subject to tax. Irs amended return form See Prohibited Transactions , later. Irs amended return form Employer Deduction You can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Irs amended return form The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Irs amended return form Deduction Limits The deduction limit for your contributions to a qualified plan depends on the kind of plan you have. Irs amended return form Defined contribution plans. Irs amended return form   The deduction for contributions to a defined contribution plan (profit-sharing plan or money purchase pension plan) cannot be more than 25% of the compensation paid (or accrued) during the year to your eligible employees participating in the plan. Irs amended return form If you are self-employed, you must reduce this limit in figuring the deduction for contributions you make for your own account. Irs amended return form See Deduction Limit for Self-Employed Individuals , later. Irs amended return form   When figuring the deduction limit, the following rules apply. Irs amended return form Elective deferrals (discussed later) are not subject to the limit. Irs amended return form Compensation includes elective deferrals. Irs amended return form The maximum compensation that can be taken into account for each employee in 2013 is $255,000 ($260,000 for 2014). Irs amended return form Defined benefit plans. Irs amended return form   The deduction for contributions to a defined benefit plan is based on actuarial assumptions and computations. Irs amended return form Consequently, an actuary must figure your deduction limit. Irs amended return form    In figuring the deduction for contributions, you cannot take into account any contributions or benefits that are more than the limits discussed earlier under Limits on Contributions and Benefits, earlier. Irs amended return form Table 4–1. Irs amended return form Carryover of Excess Contributions Illustrated—Profit-Sharing Plan (000's omitted) Year Participants' compensation Participants' share of required contribution (10% of annual profit) Deductible  limit for current year (25% of compensation) Contribution Excess contribution carryover used1 Total  deduction including carryovers Excess contribution carryover available at end of year 2010 $1,000 $100 $250 $100 $ 0 $100 $ 0 2011 400 165 100 165 0 100 65 2012 500 100 125 100 25 125 40 2013 600 100 150 100 40 140 0  1There were no carryovers from years before 2010. Irs amended return form Deduction Limit for Self-Employed Individuals If you make contributions for yourself, you need to make a special computation to figure your maximum deduction for these contributions. Irs amended return form Compensation is your net earnings from self-employment, defined in chapter 1. Irs amended return form This definition takes into account both the following items. Irs amended return form The deduction for the deductible part of your self-employment tax. Irs amended return form The deduction for contributions on your behalf to the plan. Irs amended return form The deduction for your own contributions and your net earnings depend on each other. Irs amended return form For this reason, you determine the deduction for your own contributions indirectly by reducing the contribution rate called for in your plan. Irs amended return form To do this, use either the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed in chapter 5. Irs amended return form Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Irs amended return form Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Irs amended return form For example, sole proprietors deduct them on Schedule C (Form 1040) or Schedule F (Form 1040); partnerships deduct them on Form 1065; and corporations deduct them on Form 1120, or Form 1120S. Irs amended return form Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Irs amended return form (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you get from the partnership. Irs amended return form ) Carryover of Excess Contributions If you contribute more to the plans than you can deduct for the year, you can carry over and deduct the difference in later years, combined with your contributions for those years. Irs amended return form Your combined deduction in a later year is limited to 25% of the participating employees' compensation for that year. Irs amended return form For purposes of this limit, a SEP is treated as a profit-sharing (defined contribution) plan. Irs amended return form However, this percentage limit must be reduced to figure your maximum deduction for contributions you make for yourself. Irs amended return form See Deduction Limit for Self-Employed Individuals, earlier. Irs amended return form The amount you carry over and deduct may be subject to the excise tax discussed next. Irs amended return form Table 4-1, earlier, illustrates the carryover of excess contributions to a profit-sharing plan. Irs amended return form Excise Tax for Nondeductible (Excess) Contributions If you contribute more than your deduction limit to a retirement plan, you have made nondeductible contributions and you may be liable for an excise tax. Irs amended return form In general, a 10% excise tax applies to nondeductible contributions made to qualified pension and profit-sharing plans and to SEPs. Irs amended return form Special rule for self-employed individuals. Irs amended return form   The 10% excise tax does not apply to any contribution made to meet the minimum funding requirements in a money purchase pension plan or a defined benefit plan. Irs amended return form Even if that contribution is more than your earned income from the trade or business for which the plan is set up, the difference is not subject to this excise tax. Irs amended return form See Minimum Funding Requirement , earlier. Irs amended return form Reporting the tax. Irs amended return form   You must report the tax on your nondeductible contributions on Form 5330. Irs amended return form Form 5330 includes a computation of the tax. Irs amended return form See the separate instructions for completing the form. Irs amended return form Elective Deferrals (401(k) Plans) Your qualified plan can include a cash or deferred arrangement under which participants can choose to have you contribute part of their before-tax compensation to the plan rather than receive the compensation in cash. Irs amended return form A plan with this type of arrangement is popularly known as a “401(k) plan. Irs amended return form ” (As a self-employed individual participating in the plan, you can contribute part of your before-tax net earnings from the business. Irs amended return form ) This contribution is called an “elective deferral” because participants choose (elect) to defer receipt of the money. Irs amended return form In general, a qualified plan can include a cash or deferred arrangement only if the qualified plan is one of the following plans. Irs amended return form A profit-sharing plan. Irs amended return form A money purchase pension plan in existence on June 27, 1974, that included a salary reduction arrangement on that date. Irs amended return form Partnership. Irs amended return form   A partnership can have a 401(k) plan. Irs amended return form Restriction on conditions of participation. Irs amended return form   The plan cannot require, as a condition of participation, that an employee complete more than 1 year of service. Irs amended return form Matching contributions. Irs amended return form   If your plan permits, you can make matching contributions for an employee who makes an elective deferral to your 401(k) plan. Irs amended return form For example, the plan might provide that you will contribute 50 cents for each dollar your participating employees choose to defer under your 401(k) plan. Irs amended return form Matching contributions are generally subject to the ACP test discussed earlier under Employee Contributions. Irs amended return form Nonelective contributions. Irs amended return form   You can also make contributions (other than matching contributions) for your participating employees without giving them the choice to take cash instead. Irs amended return form These are called nonelective contributions. Irs amended return form Employee compensation limit. Irs amended return form   No more than $255,000 of the employee's compensation can be taken into account when figuring contributions other than elective deferrals in 2013. Irs amended return form This limit is $260,000 in 2014. Irs amended return form SIMPLE 401(k) plan. Irs amended return form   If you had 100 or fewer employees who earned $5,000 or more in compensation during the preceding year, you may be able to set up a SIMPLE 401(k) plan. Irs amended return form A SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy plan requirements discussed earlier under Qualification Rules. Irs amended return form For details about SIMPLE 401(k) plans, see SIMPLE 401(k) Plan in chapter 3. Irs amended return form Distributions. Irs amended return form   Certain rules apply to distributions from 401(k) plans. Irs amended return form See Distributions From 401(k) Plans , later. Irs amended return form Limit on Elective Deferrals There is a limit on the amount an employee can defer each year under these plans. Irs amended return form This limit applies without regard to community property laws. Irs amended return form Your plan must provide that your employees cannot defer more than the limit that applies for a particular year. Irs amended return form For 2013 and 2014, the basic limit on elective deferrals is $17,500. Irs amended return form This limit applies to all salary reduction contributions and elective deferrals. Irs amended return form If, in conjunction with other plans, the deferral limit is exceeded, the difference is included in the employee's gross income. Irs amended return form Catch-up contributions. Irs amended return form   A 401(k) plan can permit participants who are age 50 or over at the end of the calendar year to also make catch-up contributions. Irs amended return form The catch-up contribution limit for 2013 and 2014 is $5,500. Irs amended return form Elective deferrals are not treated as catch-up contributions for 2013 until they exceed the $17,500 limit, the actual deferral percentage (ADP) test limit of section 401(k)(3), or the plan limit (if any). Irs amended return form However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Irs amended return form The catch-up contribution limit. Irs amended return form The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Irs amended return form Treatment of contributions. Irs amended return form   Your contributions to your own 401(k) plan are generally deductible by you for the year they are contributed to the plan. Irs amended return form Matching or nonelective contributions made to the plan are also deductible by you in the year of contribution. Irs amended return form Your employees' elective deferrals other than designated Roth contributions are tax free until distributed from the plan. Irs amended return form Elective deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Irs amended return form Forfeiture. Irs amended return form   Employees have a nonforfeitable right at all times to their accrued benefit attributable to elective deferrals. Irs amended return form Reporting on Form W-2. Irs amended return form   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Irs amended return form You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Irs amended return form You must also include them in box 12. Irs amended return form Mark the “Retirement plan” checkbox in box 13. Irs amended return form For more information, see the Form W-2 instructions. Irs amended return form Automatic Enrollment Your 401(k) plan can have an automatic enrollment feature. Irs amended return form Under this feature, you can automatically reduce an employee's pay by a fixed percentage and contribute that amount to the 401(k) plan on his or her behalf unless the employee affirmatively chooses not to have his or her pay reduced or chooses to have it reduced by a different percentage. Irs amended return form These contributions are elective deferrals. Irs amended return form An automatic enrollment feature will encourage employees' saving for retirement and will help your plan pass nondiscrimination testing (if applicable). Irs amended return form For more information, see Publication 4674, Automatic Enrollment 401(k) Plans for Small Businesses. Irs amended return form Eligible automatic contribution arrangement. Irs amended return form   Under an eligible automatic contribution arrangement (EACA), a participant is treated as having elected to have the employer make contributions in an amount equal to a uniform percentage of compensation. Irs amended return form This automatic election will remain in place until the participant specifically elects not to have such deferral percentage made (or elects a different percentage). Irs amended return form There is no required deferral percentage. Irs amended return form Withdrawals. Irs amended return form   Under an EACA, you may allow participants to withdraw their automatic contributions to the plan if certain conditions are met. Irs amended return form The participant must elect the withdrawal no later than 90 days after the date of the first elective contributions under the EACA. Irs amended return form The participant must withdraw the entire amount of EACA default contributions, including any earnings thereon. Irs amended return form   If the plan allows withdrawals under the EACA, the amount of the withdrawal other than the amount of any designated Roth contributions must be included in the employee's gross income for the tax year in which the distribution is made. Irs amended return form The additional 10% tax on early distributions will not apply to the distribution. Irs amended return form Notice requirement. Irs amended return form   Under an EACA, employees must be given written notice of the terms of the EACA within a reasonable period of time before each plan year. Irs amended return form The notice must be written in a manner calculated to be understood by the average employee and be sufficiently accurate and comprehensive in order to apprise the employee of his or her rights and obligations under the EACA. Irs amended return form The notice must include an explanation of the employee's right to elect not to have elective contributions made on his or her behalf, or to elect a different percentage, and the employee must be given a reasonable period of time after receipt of the notice before the first elective contribution is made. Irs amended return form The notice also must explain how contributions will be invested in the absence of an investment election by the employee. Irs amended return form Qualified automatic contribution arrangement. Irs amended return form    A qualified automatic contribution arrangement (QACA) is a type of safe harbor plan. Irs amended return form It contains an automatic enrollment feature, and mandatory employer contributions are required. Irs amended return form If your plan includes a QACA, it will not be subject to the ADP test (discussed later) nor the top-heavy requirements (discussed earlier). Irs amended return form Additionally, your plan will not be subject to the actual contribution percentage (ACP) test if certain additional requirements are met. Irs amended return form Under a QACA, each employee who is eligible to participate in the plan will be treated as having elected to make elective deferral contributions equal to a certain default percentage of compensation. Irs amended return form In order to not have default elective deferrals made, an employee must make an affirmative election specifying a deferral percentage (including zero, if desired). Irs amended return form If an employee does not make an affirmative election, the default deferral percentage must meet the following conditions. Irs amended return form It must be applied uniformly. Irs amended return form It must not exceed 10%. Irs amended return form It must be at least 3% in the first plan year it applies to an employee and through the end of the following year. Irs amended return form It must increase to at least 4% in the following plan year. Irs amended return form It must increase to at least 5% in the following plan year. Irs amended return form It must increase to at least 6% in subsequent plan years. Irs amended return form Matching or nonelective contributions. Irs amended return form   Under the terms of the QACA, you must make either matching or nonelective contributions according to the following terms. Irs amended return form Matching contributions. Irs amended return form You must make matching contributions on behalf of each non-highly compensated employee in the following amounts. Irs amended return form An amount equal to 100% of elective deferrals, up to 1% of compensation. Irs amended return form An amount equal to 50% of elective deferrals, from 1% up to 6% of compensation. Irs amended return form Other formulas may be used as long as they are at least as favorable to non-highly compensated employees. Irs amended return form The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Irs amended return form Nonelective contributions. Irs amended return form You must make nonelective contributions on behalf of every non-highly compensated employee eligible to participate in the plan, regardless of whether they elected to participate, in an amount equal to at least 3% of their compensation. Irs amended return form Vesting requirements. Irs amended return form   All accrued benefits attributed to matching or nonelective contributions under the QACA must be 100% vested for all employees who complete 2 years of service. Irs amended return form These contributions are subject to special withdrawal restrictions, discussed later. Irs amended return form Notice requirements. Irs amended return form   Each employee eligible to participate in the QACA must receive written notice of their rights and obligations under the QACA, within a reasonable period before each plan year. Irs amended return form The notice must be written in a manner calculated to be understood by the average employee, and it must be accurate and comprehensive. Irs amended return form The notice must explain their right to elect not to have elective contributions made on their behalf, or to have contributions made at a different percentage than the default percentage. Irs amended return form Additionally, the notice must explain how contributions will be invested in the absence of any investment election by the employee. Irs amended return form The employee must have a reasonable period of time after receiving the notice to make such contribution and investment elections prior to the first contributions under the QACA. Irs amended return form Treatment of Excess Deferrals If the total of an employee's deferrals is more than the limit for 2013, the employee can have the difference (called an excess deferral) paid out of any of the plans that permit these distributions. Irs amended return form He or she must notify the plan by April 15, 2014 (or an earlier date specified in the plan), of the amount to be paid from each plan. Irs amended return form The plan must then pay the employee that amount, plus earnings on the amount through the end of 2013, by April 15, 2014. Irs amended return form Excess withdrawn by April 15. Irs amended return form   If the employee takes out the excess deferral by April 15, 2014, it is not reported again by including it in the employee's gross income for 2014. Irs amended return form However, any income earned in 2013 on the excess deferral taken out is taxable in the tax year in which it is taken out. Irs amended return form The distribution is not subject to the additional 10% tax on early distributions. Irs amended return form   If the employee takes out part of the excess deferral and the income on it, the distribution is treated as made proportionately from the excess deferral and the income. Irs amended return form   Even if the employee takes out the excess deferral by April 15, the amount will be considered for purposes of nondiscrimination testing requirements of the plan, unless the distributed amount is for a non-highly compensated employee who participates in only one employer's 401(k) plan or plans. Irs amended return form Excess not withdrawn by April 15. Irs amended return form   If the employee does not take out the excess deferral by April 15, 2014, the excess, though taxable in 2013, is not included in the employee's cost basis in figuring the taxable amount of any eventual distributions under the plan. Irs amended return form In effect, an excess deferral left in the plan is taxed twice, once when contributed and again when distributed. Irs amended return form Also, if the employee's excess deferral is allowed to stay in the plan and the employee participates in no other employer's plan, the plan can be disqualified. Irs amended return form Reporting corrective distributions on Form 1099-R. Irs amended return form   Report corrective distributions of excess deferrals (including any earnings) on Form 1099-R. Irs amended return form For specific information about reporting corrective distributions, see the Instructions for Forms 1099-R and 5498. Irs amended return form Tax on excess contributions of highly compensated employees. Irs amended return form   The law provides tests to detect discrimination in a plan. Irs amended return form If tests, such as the actual deferral percentage test (ADP test) (see section 401(k)(3)) and the actual contribution percentage test (ACP test) (see section 401(m)(2)), show that contributions for highly compensated employees are more than the test limits for these contributions, the employer may have to pay a 10% excise tax. Irs amended return form Report the tax on Form 5330. Irs amended return form The ADP test does not apply to a safe harbor 401(k) plan (discussed next) nor to a QACA. Irs amended return form Also, the ACP test does not apply to these plans if certain additional requirements are met. Irs amended return form   The tax for the year is 10% of the excess contributions for the plan year ending in your tax year. Irs amended return form Excess contributions are elective deferrals, employee contributions, or employer matching or nonelective contributions that are more than the amount permitted under the ADP test or the ACP test. Irs amended return form   See Regulations sections 1. Irs amended return form 401(k)-2 and 1. Irs amended return form 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Irs amended return form    If the plan fails the ADP or ACP testing, and the failure is not corrected by the end of the next plan year, the plan can be disqualified. Irs amended return form Safe harbor 401(k) plan. Irs amended return form If you meet the requirements for a safe harbor 401(k) plan, you do not have to satisfy the ADP test, nor the ACP test, if certain additional requirements are met. Irs amended return form For your plan to be a safe harbor plan, you must meet the following conditions. Irs amended return form Matching or nonelective contributions. Irs amended return form You must make matching or nonelective contributions according to one of the following formulas. Irs amended return form Matching contributions. Irs amended return form You must make matching contributions according to the following rules. Irs amended return form You must contribute an amount equal to 100% of each non-highly compensated employee's elective deferrals, up to 3% of compensation. Irs amended return form You must contribute an amount equal to 50% of each non-highly compensated employee's elective deferrals, from 3% up to 5% of compensation. Irs amended return form The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Irs amended return form Nonelective contributions. Irs amended return form You must make nonelective contributions, without regard to whether the employee made elective deferrals, on behalf of all non-highly compensated employees eligible to participate in the plan, equal to at least 3% of the employee's compensation. Irs amended return form These mandatory matching and nonelective contributions must be immediately 100% vested and are subject to special withdrawal restrictions. Irs amended return form Notice requirement. Irs amended return form You must give eligible employees written notice of their rights and obligations with regard to contributions under the plan, within a reasonable period before the plan year. Irs amended return form The other requirements for a 401(k) plan, including withdrawal and vesting rules, must also be met for your plan to qualify as a safe harbor 401(k) plan. Irs amended return form Qualified Roth Contribution Program Under this program an eligible employee can designate all or a portion of his or her elective deferrals as after-tax Roth contributions. Irs amended return form Elective deferrals designated as Roth contributions must be maintained in a separate Roth account. Irs amended return form However, unlike other elective deferrals, designated Roth contributions are not excluded from employees' gross income, but qualified distributions from a Roth account are excluded from employees' gross income. Irs amended return form Elective Deferrals Under a qualified Roth contribution program, the amount of elective deferrals that an employee may designate as a Roth contribution is limited to the maximum amount of elective deferrals excludable from gross income for the year (for 2013 and 2014, $17,500 if under age 50 and $23,000 if age 50 or over) less the total amount of the employee's elective deferrals not designated as Roth contributions. Irs amended return form Designated Roth deferrals are treated the same as pre-tax elective deferrals for most purposes, including: The annual individual elective deferral limit (total of all designated Roth contributions and traditional, pre-tax elective deferrals) of $17,500 for 2013 and 2014, with an additional $5,500 if age 50 or over for 2013 and 2014, Determining the maximum employee and employer annual contributions of the lesser of 100% of compensation or $51,000 for 2013 ($52,000 for 2014), Nondiscrimination testing, Required distributions, and Elective deferrals not taken into account for purposes of deduction limits. Irs amended return form Qualified Distributions A qualified distribution is a distribution that is made after the employee's nonexclusion period and: On or after the employee attains age   59½, On account of the employee's being disabled, or On or after the employee's death. Irs amended return form An employee's nonexclusion period for a plan is the 5-tax-year period beginning with the earlier of the following tax years. Irs amended return form The first tax year in which the employee made a contribution to his or her Roth account in the plan, or If a rollover contribution was made to the employee's designated Roth account from a designated Roth account previously established for the employee under another plan, then the first tax year the employee made a designated Roth contribution to the previously established account. Irs amended return form Rollover. Irs amended return form   Beginning September 28, 2010, a rollover from another account can be made to a designated Roth account in the same plan. Irs amended return form For additional information on these in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. Irs amended return form R. Irs amended return form B. Irs amended return form 872, available at www. Irs amended return form irs. Irs amended return form gov/irb/2010-51_IRB/ar11. Irs amended return form html, and Notice 2013-74. Irs amended return form A distribution from a designated Roth account can only be rolled over to another designated Roth account or a Roth IRA. Irs amended return form Rollover amounts do not apply toward the annual deferral limit. Irs amended return form Reporting Requirements You must report a contribution to a Roth account on Form W-2 and a distribution from a Roth account on Form 1099-R. Irs amended return form See the Form W-2 and 1099-R instructions for detailed information. Irs amended return form Distributions Amounts paid to plan participants from a qualified plan are called distributions. Irs amended return form Distributions may be nonperiodic, such as lump-sum distributions, or periodic, such as annuity payments. Irs amended return form Also, certain loans may be treated as distributions. Irs amended return form See Loans Treated as Distributions in Publication 575. Irs amended return form Required Distributions A qualified plan must provide that each participant will either: Receive his or her entire interest (benefits) in the plan by the required beginning date (defined later), or Begin receiving regular periodic distributions by the required beginning date in annual amounts calculated to distribute the participant's entire interest (benefits) over his or her life expectancy or over the joint life expectancy of the participant and the designated beneficiary (or over a shorter period). Irs amended return form These distribution rules apply individually to each qualified plan. Irs amended return form You cannot satisfy the requirement for one plan by taking a distribution from another. Irs amended return form The plan must provide that these rules override any inconsistent distribution options previously offered. Irs amended return form Minimum distribution. Irs amended return form   If the account balance of a qualified plan participant is to be distributed (other than as an annuity), the plan administrator must figure the minimum amount required to be distributed each distribution calendar year. Irs amended return form This minimum is figured by dividing the account balance by the applicable life expectancy. Irs amended return form The plan administrator can use the life expectancy tables in Appendix C of Publication 590 for this purpose. Irs amended return form For more information on figuring the minimum distribution, see Tax on Excess Accumulation in Publication 575. Irs amended return form Required beginning date. Irs amended return form   Generally, each participant must receive his or her entire benefits in the plan or begin to receive periodic distributions of benefits from the plan by the required beginning date. Irs amended return form   A participant must begin to receive distributions from his or her qualified retirement plan by April 1 of the first year after the later of the following years. Irs amended return form Calendar year in which he or she reaches age 70½. Irs amended return form Calendar year in which he or she retires from employment with the employer maintaining the plan. Irs amended return form However, the plan may require the participant to begin receiving distributions by April 1 of the year after the participant reaches age 70½ even if the participant has not retired. Irs amended return form   If the participant is a 5% owner of the employer maintaining the plan, the participant must begin receiving distributions by April 1 of the first year after the calendar year in which the participant reached age 70½. Irs amended return form For more information, see Tax on Excess Accumulation in Publication 575. Irs amended return form Distributions after the starting year. Irs amended return form   The distribution required to be made by April 1 is treated as a distribution for the starting year. Irs amended return form (The starting year is the year in which the participant meets (1) or (2) above, whichever applies. Irs amended return form ) After the starting year, the participant must receive the required distribution for each year by December 31 of that year. Irs amended return form If no distribution is made in the starting year, required distributions for 2 years must be made in the next year (one by April 1 and one by December 31). Irs amended return form Distributions after participant's death. Irs amended return form   See Publication 575 for the special rules covering distributions made after the death of a participant. Irs amended return form Distributions From 401(k) Plans Generally, distributions cannot be made until one of the following occurs. Irs amended return form The employee retires, dies, becomes disabled, or otherwise severs employment. Irs amended return form The plan ends and no other defined contribution plan is established or continued. Irs amended return form In the case of a 401(k) plan that is part of a profit-sharing plan, the employee reaches age 59½ or suffers financial hardship. Irs amended return form For the rules on hardship distributions, including the limits on them, see Regulations section 1. Irs amended return form 401(k)-1(d). Irs amended return form The employee becomes eligible for a qualified reservist distribution (defined next). Irs amended return form Certain distributions listed above may be subject to the tax on early distributions discussed later. Irs amended return form Qualified reservist distributions. Irs amended return form   A qualified reservist distribution is a distribution from an IRA or an elective deferral account made after September 11, 2001, to a military reservist or a member of the National Guard who has been called to active duty for at least 180 days or for an indefinite period. Irs amended return form All or part of a qualified reservist distribution can be recontributed to an IRA. Irs amended return form The additional 10% tax on early distributions does not apply to a qualified reservist distribution. Irs amended return form Tax Treatment of Distributions Distributions from a qualified plan minus a prorated part of any cost basis are subject to income tax in the year they are distributed. Irs amended return form Since most recipients have no cost basis, a distribution is generally fully taxable. Irs amended return form An exception is a distribution that is properly rolled over as discussed under Rollover, next. Irs amended return form The tax treatment of distributions depends on whether they are made periodically over several years or life (periodic distributions) or are nonperiodic distributions. Irs amended return form See Taxation of Periodic Payments and Taxation of Nonperiodic Payments in Publication 575 for a detailed description of how distributions are taxed, including the 10-year tax option or capital gain treatment of a lump-sum distribution. Irs amended return form Note. Irs amended return form A recipient of a distribution from a designated Roth account will have a cost basis since designated Roth contributions are made on an after-tax basis. Irs amended return form Also, a distribution from a designated Roth account is entirely tax-free if certain conditions are met. Irs amended return form See Qualified distributions under Qualified Roth Contribution Program, earlier. Irs amended return form Rollover. Irs amended return form   The recipient of an eligible rollover distribution from a qualified plan can defer the tax on it by rolling it over into a traditional IRA or another eligible retirement plan. Irs amended return form However, it may be subject to withholding as discussed under Withholding requirement, later. Irs amended return form A rollover can also be made to a Roth IRA, in which case, any previously untaxed amounts are includible in gross income unless the rollover is from a designated Roth account. Irs amended return form Eligible rollover distribution. Irs amended return form   This is a distribution of all or any part of an employee's balance in a qualified retirement plan that is not any of the following. Irs amended return form A required minimum distribution. Irs amended return form See Required Distributions , earlier. Irs amended return form Any of a series of substantially equal payments made at least once a year over any of the following periods. Irs amended return form The employee's life or life expectancy. Irs amended return form The joint lives or life expectancies of the employee and beneficiary. Irs amended return form A period of 10 years or longer. Irs amended return form A hardship distribution. Irs amended return form The portion of a distribution that represents the return of an employee's nondeductible contributions to the plan. Irs amended return form See Employee Contributions , earlier, and Rollover of nontaxable amounts, next. Irs amended return form Loans treated as distributions. Irs amended return form Dividends on employer securities. Irs amended return form The cost of any life insurance coverage provided under a qualified retirement plan. Irs amended return form Similar items designated by the IRS in published guidance. Irs amended return form See, for example, the Instructions for Forms 1099-R and 5498. Irs amended return form Rollover of nontaxable amounts. Irs amended return form   You may be able to roll over the nontaxable part of a distribution to another qualified retirement plan or a section 403(b) plan, or to an IRA. Irs amended return form If the rollover is to a qualified retirement plan or a section 403(b) plan that separately accounts for the taxable and nontaxable parts of the rollover, the transfer must be made through a direct (trustee-to-trustee) rollover. Irs amended return form If the rollover is to an IRA, the transfer can be made by any rollover method. Irs amended return form Note. Irs amended return form A distribution from a designated Roth account can be rolled over to another designated Roth account or to a Roth IRA. Irs amended return form If the rollover is to a Roth IRA, it can be rolled over by any rollover method, but if the rollover is to another designated Roth account, it must be rolled over directly (trustee-to-trustee). Irs amended return form More information. Irs amended return form   For more information about rollovers, see Rollovers in Pubs. Irs amended return form 575 and 590. Irs amended return form Withholding requirement. Irs amended return form   If, during a year, a qualified plan pays to a participant one or more eligible rollover distributions (defined earlier) that are reasonably expected to total $200 or more, the payor must withhold 20% of the taxable portion of each distribution for federal income tax. Irs amended return form Exceptions. Irs amended return form   If, instead of having the distribution paid to him or her, the participant chooses to have the plan pay it directly to an IRA or another eligible retirement plan (a direct rollover), no withholding is required. Irs amended return form   If the distribution is not an eligible rollover distribution, defined earlier, the 20% withholding requirement does not apply. Irs amended return form Other withholding rules apply to distributions that are not eligible rollover distributions, such as long-term periodic distributions and required distributions (periodic or nonperiodic). Irs amended return form However, the participant can choose not to have tax withheld from these distributions. Irs amended return form If the participant does not make this choice, the following withholding rules apply. Irs amended return form For periodic distributions, withholding is based on their treatment as wages. Irs amended return form For nonperiodic distributions, 10% of the taxable part is withheld. Irs amended return form Estimated tax payments. Irs amended return form   If no income tax is withheld or not enough tax is withheld, the recipient of a distribution may have to make estimated tax payments. Irs amended return form For more information, see Withholding Tax and Estimated Tax in Publication 575. Irs amended return form Section 402(f) Notice. Irs amended return form   If a distribution is an eligible rollover distribution, as defined earlier, you must provide a written notice to the recipient that explains the following rules regarding such distributions. Irs amended return form That the distribution may be directly transferred to an eligible retirement plan and information about which distributions are eligible for this direct transfer. Irs amended return form That tax will be withheld from the distribution if it is not directly transferred to an eligible retirement plan. Irs amended return form That the distribution will not be subject to tax if transferred to an eligible retirement plan within 60 days after the date the recipient receives the distribution. Irs amended return form Certain other rules that may be applicable. Irs amended return form   Notice 2009-68, 2009-39 I. Irs amended return form R. Irs amended return form B. Irs amended return form 423, available at www. Irs amended return form irs. Irs amended return form gov/irb/2009-39_IRB/ar14. Irs amended return form html, contains two updated safe harbor section 402(f) notices that plan administrators may provide recipients of eligible rollover distributions. Irs amended return form If the plan allows in-plan Roth rollovers, the 402(f) notice must be amended to reflect this. Irs amended return form Notice 2010-84 contains guidance on how to modify a 402(f) notice for in-plan Roth rollovers. Irs amended return form Timing of notice. Irs amended return form   The notice generally must be provided no less than 30 days and no more than 180 days before the date of a distribution. Irs amended return form Method of notice. Irs amended return form   The written notice must be provided individually to each distributee of an eligible rollover distribution. Irs amended return form Posting of the notice is not sufficient. Irs amended return form However, the written requirement may be satisfied through the use of electronic media if certain additional conditions are met. Irs amended return form See Regulations section 1. Irs amended return form 401(a)-21. Irs amended return form Tax on failure to give notice. Irs amended return form   Failure to give a 402(f) notice will result in a tax of $100 for each failure, with a total not exceeding $50,000 per calendar year. Irs amended return form The tax will not be imposed if it is shown that such failure is due to reasonable cause and not to willful neglect. Irs amended return form Tax on Early Distributions If a distribution is made to an employee under the plan before he or she reaches age 59½, the employee may have to pay a 10% additional tax on the distribution. Irs amended return form This tax applies to the amount received that the employee must include in income. Irs amended return form Exceptions. Irs amended return form   The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances. Irs amended return form Made to a beneficiary (or to the estate of the employee) on or after the death of the employee. Irs amended return form Made due to the employee having a qualifying disability. Irs amended return form Made as part of a series of substantially equal periodic payments beginning after separation from service and made at least annually for the life or life expectancy of the employee or the joint lives or life expectancies of the employee and his or her designated beneficiary. Irs amended return form (The payments under this exception, except in the case of death or disability, must continue for at least 5 years or until the employee reaches age 59½, whichever is the longer period. Irs amended return form ) Made to an employee after separation from service if the separation occurred during o