Regulations Modified to Allow Use of Forfeitures to Fund QMACs and QNECs
The IRS has published final regulations (TD 9835) that modify the requirements for qualified matching contributions (QMACs) and qualified nonelective contributions (QNECs) for employer retirement plans. These regulations are adopted essentially unchanged from the proposed versions issued in January 2017.
These payments are used to deal with issues that arise when an employer initially runs the ADP and/or ACP tests for a retirement plan and discovers the plan does not comply with one or both tests for the plan year.
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