File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Efile For 2012

Irs 2012 Tax Forms 1040ezFederal Income Tax Forms For 20122012 State Tax FormsTax Amendment FormsWww Freetaxusa2011 Income Tax ReturnsTax Online Free2008 Tax ReturnFree Military TaxesFed Tax Form 1040xAmmending A Tax ReturnFree Tax Usa Com1040 Ez Forms 20144506t Ez Form2012 Income Tax Forms 1040ezIrs Extention FormFile Taxes Free1040ez Fill In Form2009 State Tax FormsFile Federal And State Tax For FreeTurbotax 2011 Tax PreparationHow To Fill Out A 1040xFree Downloadable Irs Tax FormsH & R Block TaxesUnemployment Taxes 2011File Taxes OnlineFile Taxes OnlineCan You File An Amended Tax Return OnlineIrs Forms 1040Taxact 2011Prior Year Tax FormsEztaxH And R Block Free File OnlineAmend TaxFreetaxusa2011 Taxes1040ez TelefileH And R Block Military2011 Tax Return Form 1040Filing Federal And State Taxes For FreeBack Tax Help

Efile For 2012

Efile for 2012 Internal Revenue Bulletin:  2012-14  April 2, 2012  Rev. Efile for 2012 Proc. Efile for 2012 2012-23 Table of Contents SECTION 1. Efile for 2012 PURPOSE SECTION 2. Efile for 2012 BACKGROUND SECTION 3. Efile for 2012 SCOPE SECTION 4. Efile for 2012 APPLICATION. Efile for 2012 01 Limitations on Depreciation Deductions for Certain Automobiles. Efile for 2012 . Efile for 2012 02 Inclusions in Income of Lessees of Passenger Automobiles. Efile for 2012 SECTION 5. Efile for 2012 EFFECTIVE DATE SECTION 6. Efile for 2012 DRAFTING INFORMATION SECTION 1. Efile for 2012 PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2012, including separate tables of limitations on depreciation deductions for trucks and vans; and (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2012, including a separate table of inclusion amounts for lessees of trucks and vans. Efile for 2012 The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. Efile for 2012 SECTION 2. Efile for 2012 BACKGROUND . Efile for 2012 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. Efile for 2012 For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. Efile for 2012 The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. Efile for 2012 This change reflects the higher rate of price inflation for trucks and vans since 1988. Efile for 2012 . Efile for 2012 02 Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. Efile for 2012 L. Efile for 2012 No. Efile for 2012 111-312, 124 Stat. Efile for 2012 3296 (Dec. Efile for 2012 17, 2010) (the “Act”) extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2013, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2013. Efile for 2012 Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. Efile for 2012 . Efile for 2012 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). Efile for 2012 Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. Efile for 2012 Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2010, that is round 2 extension property (as defined in § 168(k)(4)(I)(iv)). Efile for 2012 Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. Efile for 2012 This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2012 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. Efile for 2012 . Efile for 2012 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. Efile for 2012 The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. Efile for 2012 Under § 1. Efile for 2012 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. Efile for 2012 One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. Efile for 2012 Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. Efile for 2012 SECTION 3. Efile for 2012 SCOPE . Efile for 2012 01 The limitations on depreciation deductions in section 4. Efile for 2012 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2012, and continue to apply for each taxable year that the passenger automobile remains in service. Efile for 2012 . Efile for 2012 02 The tables in section 4. Efile for 2012 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2012. Efile for 2012 Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. Efile for 2012 See Rev. Efile for 2012 Proc. Efile for 2012 2007-30, 2007-1 C. Efile for 2012 B. Efile for 2012 1104, for passenger automobiles first leased during calendar year 2007; Rev. Efile for 2012 Proc. Efile for 2012 2008-22, 2008-1 C. Efile for 2012 B. Efile for 2012 658, for passenger automobiles first leased during calendar year 2008; Rev. Efile for 2012 Proc. Efile for 2012 2009-24, 2009-17 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 885, for passenger automobiles first leased during calendar year 2009; Rev. Efile for 2012 Proc. Efile for 2012 2010-18, 2010-9 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 427, as amplified and modified by section 4. Efile for 2012 03 of Rev. Efile for 2012 Proc. Efile for 2012 2011-21, 2011-12 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 560, for passenger automobiles first leased during calendar year 2010; and Rev. Efile for 2012 Proc. Efile for 2012 2011-21, for passenger automobiles first leased during calendar year 2011. Efile for 2012 SECTION 4. Efile for 2012 APPLICATION . Efile for 2012 01 Limitations on Depreciation Deductions for Certain Automobiles. Efile for 2012 (1) Amount of the inflation adjustment. Efile for 2012 (a) Passenger automobiles (other than trucks or vans). Efile for 2012 Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. Efile for 2012 Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. Efile for 2012 The new car component of the CPI was 115. Efile for 2012 2 for October 1987 and 143. Efile for 2012 419 for October 2011. Efile for 2012 The October 2011 index exceeded the October 1987 index by 28. Efile for 2012 219. Efile for 2012 Therefore, the automobile price inflation adjustment for 2012 for passenger automobiles (other than trucks and vans) is 24. Efile for 2012 5 percent (28. Efile for 2012 219/115. Efile for 2012 2 x 100%). Efile for 2012 The dollar limitations in § 280F(a) are multiplied by a factor of 0. Efile for 2012 245, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2012. Efile for 2012 This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2012. Efile for 2012 (b) Trucks and vans. Efile for 2012 To determine the dollar limitations for trucks and vans first placed in service during calendar year 2012, the Service uses the new truck component of the CPI instead of the new car component. Efile for 2012 The new truck component of the CPI was 112. Efile for 2012 4 for October 1987 and 146. Efile for 2012 607 for October 2011. Efile for 2012 The October 2011 index exceeded the October 1987 index by 34. Efile for 2012 207. Efile for 2012 Therefore, the automobile price inflation adjustment for 2012 for trucks and vans is 30. Efile for 2012 43 percent (34. Efile for 2012 207/112. Efile for 2012 4 x 100%). Efile for 2012 The dollar limitations in § 280F(a) are multiplied by a factor of 0. Efile for 2012 3043, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. Efile for 2012 This adjustment applies to all trucks and vans that are first placed in service in calendar year 2012. Efile for 2012 (2) Amount of the limitation. Efile for 2012 Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2012. Efile for 2012 Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction applies. Efile for 2012 Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction does not apply. Efile for 2012 REV. Efile for 2012 PROC. Efile for 2012 2012-23 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. Efile for 2012 PROC. Efile for 2012 2012-23 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 REV. Efile for 2012 PROC. Efile for 2012 2012-23 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. Efile for 2012 PROC. Efile for 2012 2012-23 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 . Efile for 2012 02 Inclusions in Income of Lessees of Passenger Automobiles. Efile for 2012 A taxpayer must follow the procedures in § 1. Efile for 2012 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2012. Efile for 2012 In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. Efile for 2012 REV. Efile for 2012 PROC. Efile for 2012 2012-23 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $18,500 $19,000 2 4 5 6 8 19,000 19,500 2 4 7 7 9 19,500 20,000 2 5 8 8 10 20,000 20,500 3 5 9 10 11 20,500 21,000 3 6 9 12 12 21,000 21,500 3 7 10 12 14 21,500 22,000 3 8 11 13 16 22,000 23,000 4 8 13 15 17 23,000 24,000 4 10 15 17 20 24,000 25,000 5 11 17 19 23 25,000 26,000 6 12 19 21 26 26,000 27,000 6 14 20 24 28 27,000 28,000 7 15 22 26 31 28,000 29,000 7 16 25 28 33 29,000 30,000 8 18 25 32 35 30,000 31,000 9 19 27 34 38 31,000 32,000 9 20 30 36 41 32,000 33,000 10 21 32 38 43 33,000 34,000 10 23 33 41 46 34,000 35,000 11 24 35 43 49 35,000 36,000 12 25 37 45 52 36,000 37,000 12 27 39 47 54 37,000 38,000 13 28 41 49 57 38,000 39,000 13 29 43 52 59 39,000 40,000 14 30 45 54 62 40,000 41,000 14 32 47 56 65 41,000 42,000 15 33 49 58 68 42,000 43,000 16 34 51 61 70 43,000 44,000 16 36 52 63 73 44,000 45,000 17 37 54 66 75 45,000 46,000 17 38 57 67 78 46,000 47,000 18 39 59 70 80 47,000 48,000 19 40 61 72 83 48,000 49,000 19 42 62 75 86 49,000 50,000 20 43 64 77 89 50,000 51,000 20 45 66 79 91 51,000 52,000 21 46 68 81 94 52,000 53,000 21 47 70 84 96 53,000 54,000 22 48 72 86 99 54,000 55,000 23 49 74 88 102 55,000 56,000 23 51 76 90 104 56,000 57,000 24 52 78 92 107 57,000 58,000 24 54 79 95 110 58,000 59,000 25 55 81 97 113 59,000 60,000 26 56 83 100 115 60,000 62,000 26 58 86 103 119 62,000 64,000 28 60 90 108 124 64,000 66,000 29 63 94 112 129 66,000 68,000 30 66 97 117 135 68,000 70,000 31 68 102 121 140 70,000 72,000 32 71 105 126 145 72,000 74,000 33 74 109 130 151 74,000 76,000 35 76 113 135 156 76,000 78,000 36 78 117 140 161 78,000 80,000 37 81 120 145 166 80,000 85,000 39 86 127 152 176 85,000 90,000 42 92 137 163 189 90,000 95,000 45 98 147 175 202 95,000 100,000 48 105 155 187 215 100,000 110,000 52 115 170 203 235 110,000 120,000 58 127 189 227 262 120,000 130,000 64 140 208 250 288 130,000 140,000 70 153 227 272 315 140,000 150,000 75 166 246 296 340 150,000 160,000 81 179 265 318 368 160,000 170,000 87 192 284 341 394 170,000 180,000 93 204 304 364 420 180,000 190,000 99 217 323 387 446 190,000 200,000 105 230 342 409 473 200,000 210,000 111 243 361 432 499 210,000 220,000 116 256 380 455 526 220,000 230,000 122 269 399 478 552 230,000 240,000 128 282 418 501 578 240,000 and up 134 294 437 524 605 REV. Efile for 2012 PROC. Efile for 2012 2012-23 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $19,000 $19,500 1 4 5 6 7 19,500 20,000 2 4 6 7 9 20,000 20,500 2 5 7 8 10 20,500 21,000 2 5 8 10 11 21,000 21,500 3 6 9 10 13 21,500 22,000 3 6 10 12 14 22,000 23,000 3 8 11 14 15 23,000 24,000 4 9 13 16 18 24,000 25,000 4 10 15 19 21 25,000 26,000 5 11 17 21 24 26,000 27,000 6 12 19 23 26 27,000 28,000 6 14 21 25 29 28,000 29,000 7 15 23 27 32 29,000 30,000 7 17 24 30 34 30,000 31,000 8 18 26 32 37 31,000 32,000 9 19 28 34 40 32,000 33,000 9 20 31 36 42 33,000 34,000 10 21 33 39 44 34,000 35,000 10 23 34 41 48 35,000 36,000 11 24 36 44 50 36,000 37,000 12 25 38 46 53 37,000 38,000 12 27 40 48 55 38,000 39,000 13 28 42 50 58 39,000 40,000 13 29 44 53 60 40,000 41,000 14 31 45 55 63 41,000 42,000 14 32 48 57 66 42,000 43,000 15 33 50 59 69 43,000 44,000 16 34 52 61 72 44,000 45,000 16 36 53 64 74 45,000 46,000 17 37 55 66 77 46,000 47,000 17 38 58 68 79 47,000 48,000 18 40 59 70 82 48,000 49,000 19 41 61 73 84 49,000 50,000 19 42 63 75 87 50,000 51,000 20 43 65 78 89 51,000 52,000 20 45 66 80 93 52,000 53,000 21 46 68 83 95 53,000 54,000 21 48 70 84 98 54,000 55,000 22 49 72 87 100 55,000 56,000 23 50 74 89 103 56,000 57,000 23 51 76 92 105 57,000 58,000 24 52 78 94 108 58,000 59,000 24 54 80 96 111 59,000 60,000 25 55 82 98 114 60,000 62,000 26 57 85 101 118 62,000 64,000 27 60 88 106 123 64,000 66,000 28 62 93 110 128 66,000 68,000 29 65 96 115 134 68,000 70,000 30 67 100 120 139 70,000 72,000 32 70 103 125 144 72,000 74,000 33 72 108 129 149 74,000 76,000 34 75 111 134 155 76,000 78,000 35 78 115 138 160 78,000 80,000 36 80 119 143 165 80,000 85,000 38 85 125 151 175 85,000 90,000 41 91 135 163 187 90,000 95,000 44 98 144 174 201 95,000 100,000 47 104 154 185 214 100,000 110,000 52 113 169 202 234 110,000 120,000 57 127 187 225 261 120,000 130,000 63 139 207 248 287 130,000 140,000 69 152 226 271 313 140,000 150,000 75 165 245 294 339 150,000 160,000 81 178 264 316 366 160,000 170,000 87 190 283 340 392 170,000 180,000 92 204 302 362 419 180,000 190,000 98 216 322 385 445 190,000 200,000 104 229 340 409 471 200,000 210,000 110 242 359 431 498 210,000 220,000 116 255 378 454 524 220,000 230,000 122 267 398 477 551 230,000 240,000 127 281 416 500 577 240,000 and up 133 294 435 523 603 SECTION 5. Efile for 2012 EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2012. Efile for 2012 SECTION 6. Efile for 2012 DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. Efile for 2012 Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). Efile for 2012 For further information regarding this revenue procedure, contact Mr. Efile for 2012 Harvey at (202) 622-4930 (not a toll-free call). Efile for 2012 Prev  Up  Next   Home   More Internal Revenue Bulletins
Print - Click this link to Print this page

Contact My Local Office in Ohio

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City Street Address Days/Hours of Service Telephone*
Akron 2 S. Main St.
Akron, OH 44308

Monday-Friday 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(330) 253-7013
Canton 301 McKinley Ave. SW
Canton, OH 44702

Monday-Friday 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(330) 588-4417 
Cincinnati  550 Main St.
Cincinnati, OH 45202 

Monday-Friday 8:30 a.m.-4:30 p.m.
 

Services Provided

(513) 263-3333 
Cincinnati
(West Chester) 
9075 Centre Pointe Dr.
West Chester, OH 45069

Monday-Friday 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

  Services Provided

(513) 263-3333 
Cleveland  1240 E. Ninth St.
Cleveland, OH 44199 

Monday-Friday 8:30 a.m.-4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

Services Provided

(216) 522-4048 
Columbus  200 N. High St.
Columbus, OH 43215 

Monday-Friday 8:30 a.m.-4:30 p.m. 

 

Services Provided

(614) 280-8691 
Dayton  200 W. Second St.
Dayton, OH 45402 

Monday-Friday 8:30 a.m.-4:30 p.m.
  

Services Provided

(937) 610-2182 
Lima  401 W. North St.
Lima, OH 45801 

Monday-Friday 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

 Services Provided

(419) 223-5873 
Mansfield  180 N. Diamond St.
Mansfield, OH 44902 

Monday-Friday 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(419) 522-9204 
Toledo  Four Seagate
433 N. Summit
Toledo, OH 43604

Monday-Friday 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:30 p.m. - 1:30 p.m.)

 

Services Provided

(419) 213-5165 
Youngstown  10 E. Commerce St. 
Youngstown, OH 44503 

Monday-Friday 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 noon - 1:00 p.m.)

 

Services Provided

(330) 746-0006 

* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).

For information on where to file your tax return please see Where to File Addresses.

 

The Taxpayer Advocate Service: Call (513) 263-3260 in Cincinnati, (216) 522-7134 in Cleveland or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see Tax Topic 104

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Offices at:

Internal Revenue Service
1240 E. 9th St.
Room 403
Cleveland, OH 44199

Internal Revenue Service
550 Main St. Room 7024
Cincinnati, OH 45202

Internal Revenue Service
200 N. High St.
Room 425
Columbus, OH 43215

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Efile For 2012

Efile for 2012 4. Efile for 2012   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. Efile for 2012 Loan secured by benefits. Efile for 2012 Waiver of survivor benefits. Efile for 2012 Waiver of 30-day waiting period before annuity starting date. Efile for 2012 Involuntary cash-out of benefits not more than dollar limit. Efile for 2012 Exception for certain loans. Efile for 2012 Exception for QDRO. Efile for 2012 SIMPLE and safe harbor 401(k) plan exception. Efile for 2012 Setting Up a Qualified PlanAdopting a Written Plan Investing Plan Assets Minimum Funding RequirementDue dates. Efile for 2012 Installment percentage. Efile for 2012 Extended period for making contributions. Efile for 2012 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. Efile for 2012 Caution: Form 5500-EZ not required. Efile for 2012 Form 5500. Efile for 2012 Electronic filing of Forms 5500 and 5500-SF. Efile for 2012 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. Efile for 2012 dol. Efile for 2012 gov/ebsa/pdf/2013-5500. Efile for 2012 pdf www. Efile for 2012 dol. Efile for 2012 gov/ebsa/pdf/2013-5500-SF. Efile for 2012 pdf W-2 Wage and Tax Statement Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Efile for 2012 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Efile for 2012 1040 U. Efile for 2012 S. Efile for 2012 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. Efile for 2012 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. Efile for 2012 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. Efile for 2012 R. Efile for 2012 10 plans. Efile for 2012 A sole proprietor or a partnership can set up one of these plans. Efile for 2012 A common-law employee or a partner cannot set up one of these plans. Efile for 2012 The plans described here can also be set up and maintained by employers that are corporations. Efile for 2012 All the rules discussed here apply to corporations except where specifically limited to the self-employed. Efile for 2012 The plan must be for the exclusive benefit of employees or their beneficiaries. Efile for 2012 These qualified plans can include coverage for a self-employed individual. Efile for 2012 As an employer, you can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Efile for 2012 The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Efile for 2012 Kinds of Plans There are two basic kinds of qualified plans—defined contribution plans and defined benefit plans—and different rules apply to each. Efile for 2012 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. Efile for 2012 Defined Contribution Plan A defined contribution plan provides an individual account for each participant in the plan. Efile for 2012 It provides benefits to a participant largely based on the amount contributed to that participant's account. Efile for 2012 Benefits are also affected by any income, expenses, gains, losses, and forfeitures of other accounts that may be allocated to an account. Efile for 2012 A defined contribution plan can be either a profit-sharing plan or a money purchase pension plan. Efile for 2012 Profit-sharing plan. Efile for 2012   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). Efile for 2012 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. Efile for 2012 An employer may even make no contribution to the plan for a given year. Efile for 2012   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. Efile for 2012   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). Efile for 2012 Money purchase pension plan. Efile for 2012   Contributions to a money purchase pension plan are fixed and are not based on your business profits. Efile for 2012 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. Efile for 2012 This applies even though the compensation of a self-employed individual as a participant is based on earned income derived from business profits. Efile for 2012 Defined Benefit Plan A defined benefit plan is any plan that is not a defined contribution plan. Efile for 2012 Contributions to a defined benefit plan are based on what is needed to provide definitely determinable benefits to plan participants. Efile for 2012 Actuarial assumptions and computations are required to figure these contributions. Efile for 2012 Generally, you will need continuing professional help to have a defined benefit plan. Efile for 2012 Qualification Rules To qualify for the tax benefits available to qualified plans, a plan must meet certain requirements (qualification rules) of the tax law. Efile for 2012 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. Efile for 2012 The following is a brief overview of important qualification rules that generally have not yet been discussed. Efile for 2012 It is not intended to be all-inclusive. Efile for 2012 See Setting Up a Qualified Plan , later. Efile for 2012 Generally, the following qualification rules also apply to a SIMPLE 401(k) retirement plan. Efile for 2012 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. Efile for 2012 Plan assets must not be diverted. Efile for 2012   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. Efile for 2012 As a general rule, the assets cannot be diverted to the employer. Efile for 2012 Minimum coverage requirement must be met. Efile for 2012   To be a qualified plan, a defined benefit plan must benefit at least the lesser of the following. Efile for 2012 50 employees, or The greater of: 40% of all employees, or Two employees. Efile for 2012 If there is only one employee, the plan must benefit that employee. Efile for 2012 Contributions or benefits must not discriminate. Efile for 2012   Under the plan, contributions or benefits to be provided must not discriminate in favor of highly compensated employees. Efile for 2012 Contributions and benefits must not be more than certain limits. Efile for 2012   Your plan must not provide for contributions or benefits that are more than certain limits. Efile for 2012 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. Efile for 2012 These limits are discussed later in this chapter under Contributions. Efile for 2012 Minimum vesting standard must be met. Efile for 2012   Your plan must satisfy certain requirements regarding when benefits vest. Efile for 2012 A benefit is vested (you have a fixed right to it) when it becomes nonforfeitable. Efile for 2012 A benefit is nonforfeitable if it cannot be lost upon the happening, or failure to happen, of any event. Efile for 2012 Special rules apply to forfeited benefit amounts. Efile for 2012 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. Efile for 2012   Forfeitures under a defined benefit plan cannot be used to increase the benefits any employee would otherwise receive under the plan. Efile for 2012 Forfeitures must be used instead to reduce employer contributions. Efile for 2012 Participation. Efile for 2012   In general, an employee must be allowed to participate in your plan if he or she meets both the following requirements. Efile for 2012 Has reached age 21. Efile for 2012 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). Efile for 2012 A plan cannot exclude an employee because he or she has reached a specified age. Efile for 2012 Leased employee. Efile for 2012   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. Efile for 2012 These rules include those in all the following areas. Efile for 2012 Nondiscrimination in coverage, contributions, and benefits. Efile for 2012 Minimum age and service requirements. Efile for 2012 Vesting. Efile for 2012 Limits on contributions and benefits. Efile for 2012 Top-heavy plan requirements. Efile for 2012 Contributions or benefits provided by the leasing organization for services performed for you are treated as provided by you. Efile for 2012 Benefit payment must begin when required. Efile for 2012   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. Efile for 2012 The plan year in which the participant reaches the earlier of age 65 or the normal retirement age specified in the plan. Efile for 2012 The plan year in which the 10th anniversary of the year in which the participant began participating in the plan occurs. Efile for 2012 The plan year in which the participant separates from service. Efile for 2012 Early retirement. Efile for 2012   Your plan can provide for payment of retirement benefits before the normal retirement age. Efile for 2012 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. Efile for 2012 Satisfies the service requirement for the early retirement benefit. Efile for 2012 Separates from service with a nonforfeitable right to an accrued benefit. Efile for 2012 The benefit, which may be actuarially reduced, is payable when the early retirement age requirement is met. Efile for 2012 Required minimum distributions. Efile for 2012   Special rules require minimum annual distributions from qualified plans, generally beginning after age  70½. Efile for 2012 See Required Distributions , under Distributions, later. Efile for 2012 Survivor benefits. Efile for 2012   Defined benefit and money purchase pension plans must provide automatic survivor benefits in both the following forms. Efile for 2012 A qualified joint and survivor annuity for a vested participant who does not die before the annuity starting date. Efile for 2012 A qualified pre-retirement survivor annuity for a vested participant who dies before the annuity starting date and who has a surviving spouse. Efile for 2012   The automatic survivor benefit also applies to any participant under a profit-sharing plan unless all the following conditions are met. Efile for 2012 The participant does not choose benefits in the form of a life annuity. Efile for 2012 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. Efile for 2012 The plan is not a direct or indirect transferee of a plan that must provide automatic survivor benefits. Efile for 2012 Loan secured by benefits. Efile for 2012   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. Efile for 2012 Waiver of survivor benefits. Efile for 2012   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. Efile for 2012 The plan also must allow the participant to withdraw the waiver. Efile for 2012 The spouse's consent must be witnessed by a plan representative or notary public. Efile for 2012 Waiver of 30-day waiting period before annuity starting date. Efile for 2012    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. Efile for 2012   The waiver is allowed only if the distribution begins more than 7 days after the written explanation is provided. Efile for 2012 Involuntary cash-out of benefits not more than dollar limit. Efile for 2012   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. Efile for 2012   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. Efile for 2012 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. Efile for 2012   Benefits attributable to rollover contributions and earnings on them can be ignored in determining the present value of these benefits. Efile for 2012   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. Efile for 2012 A section 402(f) notice must be sent prior to an involuntary cash-out of an eligible rollover distribution. Efile for 2012 See Section 402(f) Notice under Distributions, later, for more details. Efile for 2012 Consolidation, merger, or transfer of assets or liabilities. Efile for 2012   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. Efile for 2012 (if the plan had then terminated). Efile for 2012 Benefits must not be assigned or alienated. Efile for 2012   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. Efile for 2012 Exception for certain loans. Efile for 2012   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. Efile for 2012 A disqualified person is defined later in this chapter under Prohibited Transactions. Efile for 2012 Exception for QDRO. Efile for 2012   Compliance with a QDRO (qualified domestic relations order) does not result in a prohibited assignment or alienation of benefits. Efile for 2012   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. Efile for 2012 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. Efile for 2012 No benefit reduction for social security increases. Efile for 2012   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. Efile for 2012 This rule also applies to plans supplementing the benefits provided by other federal or state laws. Efile for 2012 Elective deferrals must be limited. Efile for 2012   If your plan provides for elective deferrals, it must limit those deferrals to the amount in effect for that particular year. Efile for 2012 See Limit on Elective Deferrals later in this chapter. Efile for 2012 Top-heavy plan requirements. Efile for 2012   A top-heavy plan is one that mainly favors partners, sole proprietors, and other key employees. Efile for 2012   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. Efile for 2012 Additional requirements apply to a top-heavy plan primarily to provide minimum benefits or contributions for non-key employees covered by the plan. Efile for 2012   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. Efile for 2012 These qualification requirements for top-heavy plans are explained in section 416 and its regulations. Efile for 2012 SIMPLE and safe harbor 401(k) plan exception. Efile for 2012   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. Efile for 2012 QACAs (discussed later) also are not subject to top-heavy requirements. Efile for 2012 Setting Up a Qualified Plan There are two basic steps in setting up a qualified plan. Efile for 2012 First you adopt a written plan. Efile for 2012 Then you invest the plan assets. Efile for 2012 You, the employer, are responsible for setting up and maintaining the plan. Efile for 2012 If you are self-employed, it is not necessary to have employees besides yourself to sponsor and set up a qualified plan. Efile for 2012 If you have employees, see Participation, under Qualification Rules, earlier. Efile for 2012 Set-up deadline. Efile for 2012   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). Efile for 2012 Credit for startup costs. Efile for 2012   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. Efile for 2012 For more information, see Credit for startup costs under Reminders, earlier. Efile for 2012 Adopting a Written Plan You must adopt a written plan. Efile for 2012 The plan can be an IRS-approved master or prototype plan offered by a sponsoring organization. Efile for 2012 Or it can be an individually designed plan. Efile for 2012 Written plan requirement. Efile for 2012   To qualify, the plan you set up must be in writing and must be communicated to your employees. Efile for 2012 The plan's provisions must be stated in the plan. Efile for 2012 It is not sufficient for the plan to merely refer to a requirement of the Internal Revenue Code. Efile for 2012 Master or prototype plans. Efile for 2012   Most qualified plans follow a standard form of plan (a master or prototype plan) approved by the IRS. Efile for 2012 Master and prototype plans are plans made available by plan providers for adoption by employers (including self-employed individuals). Efile for 2012 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. Efile for 2012 Under a prototype plan, a separate trust or custodial account is established for each employer. Efile for 2012 Plan providers. Efile for 2012   The following organizations generally can provide IRS-approved master or prototype plans. Efile for 2012 Banks (including some savings and loan associations and federally insured credit unions). Efile for 2012 Trade or professional organizations. Efile for 2012 Insurance companies. Efile for 2012 Mutual funds. Efile for 2012 Individually designed plan. Efile for 2012   If you prefer, you can set up an individually designed plan to meet specific needs. Efile for 2012 Although advance IRS approval is not required, you can apply for approval by paying a fee and requesting a determination letter. Efile for 2012 You may need professional help for this. Efile for 2012 See Rev. Efile for 2012 Proc. Efile for 2012 2014-6, 2014-1 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 198, available at www. Efile for 2012 irs. Efile for 2012 gov/irb/2014-1_IRB/ar10. Efile for 2012 html, as annually updated, that may help you decide whether to apply for approval. Efile for 2012 Internal Revenue Bulletins are available on the IRS website at IRS. Efile for 2012 gov They are also available at most IRS offices and at certain libraries. Efile for 2012 User fee. Efile for 2012   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. Efile for 2012 At least one of them must be a non-highly compensated employee participating in the plan. Efile for 2012 The fee does not apply to requests made by the later of the following dates. Efile for 2012 The end of the 5th plan year the plan is in effect. Efile for 2012 The end of any remedial amendment period for the plan that begins within the first 5 plan years. Efile for 2012 The request cannot be made by the sponsor of a prototype or similar plan the sponsor intends to market to participating employers. Efile for 2012   For more information about whether the user fee applies, see Rev. Efile for 2012 Proc. Efile for 2012 2014-8, 2014-1 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 242, available at www. Efile for 2012 irs. Efile for 2012 gov/irb/2014-1_IRB/ar12. Efile for 2012 html, as may be annually updated; Notice 2003-49, 2003-32 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 294, available at www. Efile for 2012 irs. Efile for 2012 gov/irb/2003-32_IRB/ar13. Efile for 2012 html; and Notice 2011-86, 2011-45 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 698, available at www. Efile for 2012 irs. Efile for 2012 gov/irb/2011-45_IRB/ar11. Efile for 2012 html. Efile for 2012 Investing Plan Assets In setting up a qualified plan, you arrange how the plan's funds will be used to build its assets. Efile for 2012 You can establish a trust or custodial account to invest the funds. Efile for 2012 You, the trust, or the custodial account can buy an annuity contract from an insurance company. Efile for 2012 Life insurance can be included only if it is incidental to the retirement benefits. Efile for 2012 You set up a trust by a legal instrument (written document). Efile for 2012 You may need professional help to do this. Efile for 2012 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. Efile for 2012 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. Efile for 2012 If anyone other than a trustee holds them, however, the contracts or certificates must state they are not transferable. Efile for 2012 Other plan requirements. Efile for 2012   For information on other important plan requirements, see Qualification Rules , earlier in this chapter. Efile for 2012 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. Efile for 2012 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. Efile for 2012 For information on this funding requirement, see section 412 and its regulations. Efile for 2012 Quarterly installments of required contributions. Efile for 2012   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. Efile for 2012 If you do not pay the full installments timely, you may have to pay interest on any underpayment for the period of the underpayment. Efile for 2012 Due dates. Efile for 2012   The due dates for the installments are 15 days after the end of each quarter. Efile for 2012 For a calendar-year plan, the installments are due April 15, July 15, October 15, and January 15 (of the following year). Efile for 2012 Installment percentage. Efile for 2012   Each quarterly installment must be 25% of the required annual payment. Efile for 2012 Extended period for making contributions. Efile for 2012   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. Efile for 2012 Contributions A qualified plan is generally funded by your contributions. Efile for 2012 However, employees participating in the plan may be permitted to make contributions, and you may be permitted to make contributions on your own behalf. Efile for 2012 See Employee Contributions and Elective Deferrals later. Efile for 2012 Contributions deadline. Efile for 2012   You can make deductible contributions for a tax year up to the due date of your return (plus extensions) for that year. Efile for 2012 Self-employed individual. Efile for 2012   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. Efile for 2012 Your net earnings must be from your personal services, not from your investments. Efile for 2012 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. Efile for 2012 Employer Contributions There are certain limits on the contributions and other annual additions you can make each year for plan participants. Efile for 2012 There are also limits on the amount you can deduct. Efile for 2012 See Deduction Limits , later. Efile for 2012 Limits on Contributions and Benefits Your plan must provide that contributions or benefits cannot exceed certain limits. Efile for 2012 The limits differ depending on whether your plan is a defined contribution plan or a defined benefit plan. Efile for 2012 Defined benefit plan. Efile for 2012   For 2013, the annual benefit for a participant under a defined benefit plan cannot exceed the lesser of the following amounts. Efile for 2012 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. Efile for 2012 $205,000 ($210,000 for 2014). Efile for 2012 Defined contribution plan. Efile for 2012   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. Efile for 2012 100% of the participant's compensation. Efile for 2012 $51,000 ($52,000 for 2014). Efile for 2012   Catch-up contributions (discussed later under Limit on Elective Deferrals) are not subject to the above limit. Efile for 2012 Employee Contributions Participants may be permitted to make nondeductible contributions to a plan in addition to your contributions. Efile for 2012 Even though these employee contributions are not deductible, the earnings on them are tax free until distributed in later years. Efile for 2012 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. Efile for 2012 See Regulations sections 1. Efile for 2012 401(k)-2 and 1. Efile for 2012 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Efile for 2012 When Contributions Are Considered Made You generally apply your plan contributions to the year in which you make them. Efile for 2012 But you can apply them to the previous year if all the following requirements are met. Efile for 2012 You make them by the due date of your tax return for the previous year (plus extensions). Efile for 2012 The plan was established by the end of the previous year. Efile for 2012 The plan treats the contributions as though it had received them on the last day of the previous year. Efile for 2012 You do either of the following. Efile for 2012 You specify in writing to the plan administrator or trustee that the contributions apply to the previous year. Efile for 2012 You deduct the contributions on your tax return for the previous year. Efile for 2012 A partnership shows contributions for partners on Form 1065. Efile for 2012 Employer's promissory note. Efile for 2012   Your promissory note made out to the plan is not a payment that qualifies for the deduction. Efile for 2012 Also, issuing this note is a prohibited transaction subject to tax. Efile for 2012 See Prohibited Transactions , later. Efile for 2012 Employer Deduction You can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement. Efile for 2012 The contributions (and earnings and gains on them) are generally tax free until distributed by the plan. Efile for 2012 Deduction Limits The deduction limit for your contributions to a qualified plan depends on the kind of plan you have. Efile for 2012 Defined contribution plans. Efile for 2012   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. Efile for 2012 If you are self-employed, you must reduce this limit in figuring the deduction for contributions you make for your own account. Efile for 2012 See Deduction Limit for Self-Employed Individuals , later. Efile for 2012   When figuring the deduction limit, the following rules apply. Efile for 2012 Elective deferrals (discussed later) are not subject to the limit. Efile for 2012 Compensation includes elective deferrals. Efile for 2012 The maximum compensation that can be taken into account for each employee in 2013 is $255,000 ($260,000 for 2014). Efile for 2012 Defined benefit plans. Efile for 2012   The deduction for contributions to a defined benefit plan is based on actuarial assumptions and computations. Efile for 2012 Consequently, an actuary must figure your deduction limit. Efile for 2012    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. Efile for 2012 Table 4–1. Efile for 2012 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. Efile for 2012 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. Efile for 2012 Compensation is your net earnings from self-employment, defined in chapter 1. Efile for 2012 This definition takes into account both the following items. Efile for 2012 The deduction for the deductible part of your self-employment tax. Efile for 2012 The deduction for contributions on your behalf to the plan. Efile for 2012 The deduction for your own contributions and your net earnings depend on each other. Efile for 2012 For this reason, you determine the deduction for your own contributions indirectly by reducing the contribution rate called for in your plan. Efile for 2012 To do this, use either the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed in chapter 5. Efile for 2012 Then figure your maximum deduction by using the Deduction Worksheet for Self-Employed in chapter 5. Efile for 2012 Where To Deduct Contributions Deduct the contributions you make for your common-law employees on your tax return. Efile for 2012 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. Efile for 2012 Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040. Efile for 2012 (If you are a partner, contributions for yourself are shown on the Schedule K-1 (Form 1065) you get from the partnership. Efile for 2012 ) 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. Efile for 2012 Your combined deduction in a later year is limited to 25% of the participating employees' compensation for that year. Efile for 2012 For purposes of this limit, a SEP is treated as a profit-sharing (defined contribution) plan. Efile for 2012 However, this percentage limit must be reduced to figure your maximum deduction for contributions you make for yourself. Efile for 2012 See Deduction Limit for Self-Employed Individuals, earlier. Efile for 2012 The amount you carry over and deduct may be subject to the excise tax discussed next. Efile for 2012 Table 4-1, earlier, illustrates the carryover of excess contributions to a profit-sharing plan. Efile for 2012 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. Efile for 2012 In general, a 10% excise tax applies to nondeductible contributions made to qualified pension and profit-sharing plans and to SEPs. Efile for 2012 Special rule for self-employed individuals. Efile for 2012   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. Efile for 2012 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. Efile for 2012 See Minimum Funding Requirement , earlier. Efile for 2012 Reporting the tax. Efile for 2012   You must report the tax on your nondeductible contributions on Form 5330. Efile for 2012 Form 5330 includes a computation of the tax. Efile for 2012 See the separate instructions for completing the form. Efile for 2012 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. Efile for 2012 A plan with this type of arrangement is popularly known as a “401(k) plan. Efile for 2012 ” (As a self-employed individual participating in the plan, you can contribute part of your before-tax net earnings from the business. Efile for 2012 ) This contribution is called an “elective deferral” because participants choose (elect) to defer receipt of the money. Efile for 2012 In general, a qualified plan can include a cash or deferred arrangement only if the qualified plan is one of the following plans. Efile for 2012 A profit-sharing plan. Efile for 2012 A money purchase pension plan in existence on June 27, 1974, that included a salary reduction arrangement on that date. Efile for 2012 Partnership. Efile for 2012   A partnership can have a 401(k) plan. Efile for 2012 Restriction on conditions of participation. Efile for 2012   The plan cannot require, as a condition of participation, that an employee complete more than 1 year of service. Efile for 2012 Matching contributions. Efile for 2012   If your plan permits, you can make matching contributions for an employee who makes an elective deferral to your 401(k) plan. Efile for 2012 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. Efile for 2012 Matching contributions are generally subject to the ACP test discussed earlier under Employee Contributions. Efile for 2012 Nonelective contributions. Efile for 2012   You can also make contributions (other than matching contributions) for your participating employees without giving them the choice to take cash instead. Efile for 2012 These are called nonelective contributions. Efile for 2012 Employee compensation limit. Efile for 2012   No more than $255,000 of the employee's compensation can be taken into account when figuring contributions other than elective deferrals in 2013. Efile for 2012 This limit is $260,000 in 2014. Efile for 2012 SIMPLE 401(k) plan. Efile for 2012   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. Efile for 2012 A SIMPLE 401(k) plan is not subject to the nondiscrimination and top-heavy plan requirements discussed earlier under Qualification Rules. Efile for 2012 For details about SIMPLE 401(k) plans, see SIMPLE 401(k) Plan in chapter 3. Efile for 2012 Distributions. Efile for 2012   Certain rules apply to distributions from 401(k) plans. Efile for 2012 See Distributions From 401(k) Plans , later. Efile for 2012 Limit on Elective Deferrals There is a limit on the amount an employee can defer each year under these plans. Efile for 2012 This limit applies without regard to community property laws. Efile for 2012 Your plan must provide that your employees cannot defer more than the limit that applies for a particular year. Efile for 2012 For 2013 and 2014, the basic limit on elective deferrals is $17,500. Efile for 2012 This limit applies to all salary reduction contributions and elective deferrals. Efile for 2012 If, in conjunction with other plans, the deferral limit is exceeded, the difference is included in the employee's gross income. Efile for 2012 Catch-up contributions. Efile for 2012   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. Efile for 2012 The catch-up contribution limit for 2013 and 2014 is $5,500. Efile for 2012 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). Efile for 2012 However, the catch-up contribution a participant can make for a year cannot exceed the lesser of the following amounts. Efile for 2012 The catch-up contribution limit. Efile for 2012 The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. Efile for 2012 Treatment of contributions. Efile for 2012   Your contributions to your own 401(k) plan are generally deductible by you for the year they are contributed to the plan. Efile for 2012 Matching or nonelective contributions made to the plan are also deductible by you in the year of contribution. Efile for 2012 Your employees' elective deferrals other than designated Roth contributions are tax free until distributed from the plan. Efile for 2012 Elective deferrals are included in wages for social security, Medicare, and federal unemployment (FUTA) tax. Efile for 2012 Forfeiture. Efile for 2012   Employees have a nonforfeitable right at all times to their accrued benefit attributable to elective deferrals. Efile for 2012 Reporting on Form W-2. Efile for 2012   Do not include elective deferrals in the “Wages, tips, other compensation” box of Form W-2. Efile for 2012 You must, however, include them in the “Social security wages” and “Medicare wages and tips” boxes. Efile for 2012 You must also include them in box 12. Efile for 2012 Mark the “Retirement plan” checkbox in box 13. Efile for 2012 For more information, see the Form W-2 instructions. Efile for 2012 Automatic Enrollment Your 401(k) plan can have an automatic enrollment feature. Efile for 2012 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. Efile for 2012 These contributions are elective deferrals. Efile for 2012 An automatic enrollment feature will encourage employees' saving for retirement and will help your plan pass nondiscrimination testing (if applicable). Efile for 2012 For more information, see Publication 4674, Automatic Enrollment 401(k) Plans for Small Businesses. Efile for 2012 Eligible automatic contribution arrangement. Efile for 2012   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. Efile for 2012 This automatic election will remain in place until the participant specifically elects not to have such deferral percentage made (or elects a different percentage). Efile for 2012 There is no required deferral percentage. Efile for 2012 Withdrawals. Efile for 2012   Under an EACA, you may allow participants to withdraw their automatic contributions to the plan if certain conditions are met. Efile for 2012 The participant must elect the withdrawal no later than 90 days after the date of the first elective contributions under the EACA. Efile for 2012 The participant must withdraw the entire amount of EACA default contributions, including any earnings thereon. Efile for 2012   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. Efile for 2012 The additional 10% tax on early distributions will not apply to the distribution. Efile for 2012 Notice requirement. Efile for 2012   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. Efile for 2012 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. Efile for 2012 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. Efile for 2012 The notice also must explain how contributions will be invested in the absence of an investment election by the employee. Efile for 2012 Qualified automatic contribution arrangement. Efile for 2012    A qualified automatic contribution arrangement (QACA) is a type of safe harbor plan. Efile for 2012 It contains an automatic enrollment feature, and mandatory employer contributions are required. Efile for 2012 If your plan includes a QACA, it will not be subject to the ADP test (discussed later) nor the top-heavy requirements (discussed earlier). Efile for 2012 Additionally, your plan will not be subject to the actual contribution percentage (ACP) test if certain additional requirements are met. Efile for 2012 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. Efile for 2012 In order to not have default elective deferrals made, an employee must make an affirmative election specifying a deferral percentage (including zero, if desired). Efile for 2012 If an employee does not make an affirmative election, the default deferral percentage must meet the following conditions. Efile for 2012 It must be applied uniformly. Efile for 2012 It must not exceed 10%. Efile for 2012 It must be at least 3% in the first plan year it applies to an employee and through the end of the following year. Efile for 2012 It must increase to at least 4% in the following plan year. Efile for 2012 It must increase to at least 5% in the following plan year. Efile for 2012 It must increase to at least 6% in subsequent plan years. Efile for 2012 Matching or nonelective contributions. Efile for 2012   Under the terms of the QACA, you must make either matching or nonelective contributions according to the following terms. Efile for 2012 Matching contributions. Efile for 2012 You must make matching contributions on behalf of each non-highly compensated employee in the following amounts. Efile for 2012 An amount equal to 100% of elective deferrals, up to 1% of compensation. Efile for 2012 An amount equal to 50% of elective deferrals, from 1% up to 6% of compensation. Efile for 2012 Other formulas may be used as long as they are at least as favorable to non-highly compensated employees. Efile for 2012 The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Efile for 2012 Nonelective contributions. Efile for 2012 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. Efile for 2012 Vesting requirements. Efile for 2012   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. Efile for 2012 These contributions are subject to special withdrawal restrictions, discussed later. Efile for 2012 Notice requirements. Efile for 2012   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. Efile for 2012 The notice must be written in a manner calculated to be understood by the average employee, and it must be accurate and comprehensive. Efile for 2012 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. Efile for 2012 Additionally, the notice must explain how contributions will be invested in the absence of any investment election by the employee. Efile for 2012 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. Efile for 2012 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. Efile for 2012 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. Efile for 2012 The plan must then pay the employee that amount, plus earnings on the amount through the end of 2013, by April 15, 2014. Efile for 2012 Excess withdrawn by April 15. Efile for 2012   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. Efile for 2012 However, any income earned in 2013 on the excess deferral taken out is taxable in the tax year in which it is taken out. Efile for 2012 The distribution is not subject to the additional 10% tax on early distributions. Efile for 2012   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. Efile for 2012   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. Efile for 2012 Excess not withdrawn by April 15. Efile for 2012   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. Efile for 2012 In effect, an excess deferral left in the plan is taxed twice, once when contributed and again when distributed. Efile for 2012 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. Efile for 2012 Reporting corrective distributions on Form 1099-R. Efile for 2012   Report corrective distributions of excess deferrals (including any earnings) on Form 1099-R. Efile for 2012 For specific information about reporting corrective distributions, see the Instructions for Forms 1099-R and 5498. Efile for 2012 Tax on excess contributions of highly compensated employees. Efile for 2012   The law provides tests to detect discrimination in a plan. Efile for 2012 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. Efile for 2012 Report the tax on Form 5330. Efile for 2012 The ADP test does not apply to a safe harbor 401(k) plan (discussed next) nor to a QACA. Efile for 2012 Also, the ACP test does not apply to these plans if certain additional requirements are met. Efile for 2012   The tax for the year is 10% of the excess contributions for the plan year ending in your tax year. Efile for 2012 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. Efile for 2012   See Regulations sections 1. Efile for 2012 401(k)-2 and 1. Efile for 2012 401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m). Efile for 2012    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. Efile for 2012 Safe harbor 401(k) plan. Efile for 2012 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. Efile for 2012 For your plan to be a safe harbor plan, you must meet the following conditions. Efile for 2012 Matching or nonelective contributions. Efile for 2012 You must make matching or nonelective contributions according to one of the following formulas. Efile for 2012 Matching contributions. Efile for 2012 You must make matching contributions according to the following rules. Efile for 2012 You must contribute an amount equal to 100% of each non-highly compensated employee's elective deferrals, up to 3% of compensation. Efile for 2012 You must contribute an amount equal to 50% of each non-highly compensated employee's elective deferrals, from 3% up to 5% of compensation. Efile for 2012 The rate of matching contributions for highly compensated employees, including yourself, must not exceed the rates for non-highly compensated employees. Efile for 2012 Nonelective contributions. Efile for 2012 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. Efile for 2012 These mandatory matching and nonelective contributions must be immediately 100% vested and are subject to special withdrawal restrictions. Efile for 2012 Notice requirement. Efile for 2012 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. Efile for 2012 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. Efile for 2012 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. Efile for 2012 Elective deferrals designated as Roth contributions must be maintained in a separate Roth account. Efile for 2012 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. Efile for 2012 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. Efile for 2012 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. Efile for 2012 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. Efile for 2012 An employee's nonexclusion period for a plan is the 5-tax-year period beginning with the earlier of the following tax years. Efile for 2012 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. Efile for 2012 Rollover. Efile for 2012   Beginning September 28, 2010, a rollover from another account can be made to a designated Roth account in the same plan. Efile for 2012 For additional information on these in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 872, available at www. Efile for 2012 irs. Efile for 2012 gov/irb/2010-51_IRB/ar11. Efile for 2012 html, and Notice 2013-74. Efile for 2012 A distribution from a designated Roth account can only be rolled over to another designated Roth account or a Roth IRA. Efile for 2012 Rollover amounts do not apply toward the annual deferral limit. Efile for 2012 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. Efile for 2012 See the Form W-2 and 1099-R instructions for detailed information. Efile for 2012 Distributions Amounts paid to plan participants from a qualified plan are called distributions. Efile for 2012 Distributions may be nonperiodic, such as lump-sum distributions, or periodic, such as annuity payments. Efile for 2012 Also, certain loans may be treated as distributions. Efile for 2012 See Loans Treated as Distributions in Publication 575. Efile for 2012 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). Efile for 2012 These distribution rules apply individually to each qualified plan. Efile for 2012 You cannot satisfy the requirement for one plan by taking a distribution from another. Efile for 2012 The plan must provide that these rules override any inconsistent distribution options previously offered. Efile for 2012 Minimum distribution. Efile for 2012   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. Efile for 2012 This minimum is figured by dividing the account balance by the applicable life expectancy. Efile for 2012 The plan administrator can use the life expectancy tables in Appendix C of Publication 590 for this purpose. Efile for 2012 For more information on figuring the minimum distribution, see Tax on Excess Accumulation in Publication 575. Efile for 2012 Required beginning date. Efile for 2012   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. Efile for 2012   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. Efile for 2012 Calendar year in which he or she reaches age 70½. Efile for 2012 Calendar year in which he or she retires from employment with the employer maintaining the plan. Efile for 2012 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. Efile for 2012   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. Efile for 2012 For more information, see Tax on Excess Accumulation in Publication 575. Efile for 2012 Distributions after the starting year. Efile for 2012   The distribution required to be made by April 1 is treated as a distribution for the starting year. Efile for 2012 (The starting year is the year in which the participant meets (1) or (2) above, whichever applies. Efile for 2012 ) After the starting year, the participant must receive the required distribution for each year by December 31 of that year. Efile for 2012 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). Efile for 2012 Distributions after participant's death. Efile for 2012   See Publication 575 for the special rules covering distributions made after the death of a participant. Efile for 2012 Distributions From 401(k) Plans Generally, distributions cannot be made until one of the following occurs. Efile for 2012 The employee retires, dies, becomes disabled, or otherwise severs employment. Efile for 2012 The plan ends and no other defined contribution plan is established or continued. Efile for 2012 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. Efile for 2012 For the rules on hardship distributions, including the limits on them, see Regulations section 1. Efile for 2012 401(k)-1(d). Efile for 2012 The employee becomes eligible for a qualified reservist distribution (defined next). Efile for 2012 Certain distributions listed above may be subject to the tax on early distributions discussed later. Efile for 2012 Qualified reservist distributions. Efile for 2012   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. Efile for 2012 All or part of a qualified reservist distribution can be recontributed to an IRA. Efile for 2012 The additional 10% tax on early distributions does not apply to a qualified reservist distribution. Efile for 2012 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. Efile for 2012 Since most recipients have no cost basis, a distribution is generally fully taxable. Efile for 2012 An exception is a distribution that is properly rolled over as discussed under Rollover, next. Efile for 2012 The tax treatment of distributions depends on whether they are made periodically over several years or life (periodic distributions) or are nonperiodic distributions. Efile for 2012 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. Efile for 2012 Note. Efile for 2012 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. Efile for 2012 Also, a distribution from a designated Roth account is entirely tax-free if certain conditions are met. Efile for 2012 See Qualified distributions under Qualified Roth Contribution Program, earlier. Efile for 2012 Rollover. Efile for 2012   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. Efile for 2012 However, it may be subject to withholding as discussed under Withholding requirement, later. Efile for 2012 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. Efile for 2012 Eligible rollover distribution. Efile for 2012   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. Efile for 2012 A required minimum distribution. Efile for 2012 See Required Distributions , earlier. Efile for 2012 Any of a series of substantially equal payments made at least once a year over any of the following periods. Efile for 2012 The employee's life or life expectancy. Efile for 2012 The joint lives or life expectancies of the employee and beneficiary. Efile for 2012 A period of 10 years or longer. Efile for 2012 A hardship distribution. Efile for 2012 The portion of a distribution that represents the return of an employee's nondeductible contributions to the plan. Efile for 2012 See Employee Contributions , earlier, and Rollover of nontaxable amounts, next. Efile for 2012 Loans treated as distributions. Efile for 2012 Dividends on employer securities. Efile for 2012 The cost of any life insurance coverage provided under a qualified retirement plan. Efile for 2012 Similar items designated by the IRS in published guidance. Efile for 2012 See, for example, the Instructions for Forms 1099-R and 5498. Efile for 2012 Rollover of nontaxable amounts. Efile for 2012   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. Efile for 2012 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. Efile for 2012 If the rollover is to an IRA, the transfer can be made by any rollover method. Efile for 2012 Note. Efile for 2012 A distribution from a designated Roth account can be rolled over to another designated Roth account or to a Roth IRA. Efile for 2012 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). Efile for 2012 More information. Efile for 2012   For more information about rollovers, see Rollovers in Pubs. Efile for 2012 575 and 590. Efile for 2012 Withholding requirement. Efile for 2012   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. Efile for 2012 Exceptions. Efile for 2012   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. Efile for 2012   If the distribution is not an eligible rollover distribution, defined earlier, the 20% withholding requirement does not apply. Efile for 2012 Other withholding rules apply to distributions that are not eligible rollover distributions, such as long-term periodic distributions and required distributions (periodic or nonperiodic). Efile for 2012 However, the participant can choose not to have tax withheld from these distributions. Efile for 2012 If the participant does not make this choice, the following withholding rules apply. Efile for 2012 For periodic distributions, withholding is based on their treatment as wages. Efile for 2012 For nonperiodic distributions, 10% of the taxable part is withheld. Efile for 2012 Estimated tax payments. Efile for 2012   If no income tax is withheld or not enough tax is withheld, the recipient of a distribution may have to make estimated tax payments. Efile for 2012 For more information, see Withholding Tax and Estimated Tax in Publication 575. Efile for 2012 Section 402(f) Notice. Efile for 2012   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. Efile for 2012 That the distribution may be directly transferred to an eligible retirement plan and information about which distributions are eligible for this direct transfer. Efile for 2012 That tax will be withheld from the distribution if it is not directly transferred to an eligible retirement plan. Efile for 2012 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. Efile for 2012 Certain other rules that may be applicable. Efile for 2012   Notice 2009-68, 2009-39 I. Efile for 2012 R. Efile for 2012 B. Efile for 2012 423, available at www. Efile for 2012 irs. Efile for 2012 gov/irb/2009-39_IRB/ar14. Efile for 2012 html, contains two updated safe harbor section 402(f) notices that plan administrators may provide recipients of eligible rollover distributions. Efile for 2012 If the plan allows in-plan Roth rollovers, the 402(f) notice must be amended to reflect this. Efile for 2012 Notice 2010-84 contains guidance on how to modify a 402(f) notice for in-plan Roth rollovers. Efile for 2012 Timing of notice. Efile for 2012   The notice generally must be provided no less than 30 days and no more than 180 days before the date of a distribution. Efile for 2012 Method of notice. Efile for 2012   The written notice must be provided individually to each distributee of an eligible rollover distribution. Efile for 2012 Posting of the notice is not sufficient. Efile for 2012 However, the written requirement may be satisfied through the use of electronic media if certain additional conditions are met. Efile for 2012 See Regulations section 1. Efile for 2012 401(a)-21. Efile for 2012 Tax on failure to give notice. Efile for 2012   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. Efile for 2012 The tax will not be imposed if it is shown that such failure is due to reasonable cause and not to willful neglect. Efile for 2012 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. Efile for 2012 This tax applies to the amount received that the employee must include in income. Efile for 2012 Exceptions. Efile for 2012   The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances. Efile for 2012 Made to a beneficiary (or to the estate of the employee) on or after the death of the employee. Efile for 2012 Made due to the employee having a qualifying disability. Efile for 2012 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. Efile for 2012 (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. Efile for 2012 ) Made to an employee after separation from service if the separation occurred during o