Guest rocnrols2 Posted January 19, 2005 Report Share Posted January 19, 2005 Company X maintains a cafeteria plan for its employees. LTD coverage above a base line percentage of pay is paid for by the employee with pre-tax salary reduction contributions. LTD benefits are self-funded using a nonexempt welfare benefit fund. Do the employees' pretax contributions to the LTD coverage have to get taken into account for purposes of determining the 419/419A limits? Link to comment Share on other sites More sharing options...
vebaguru Posted January 23, 2005 Report Share Posted January 23, 2005 Yes, although the calculation is under 419, not 419A. Section 419 provides that "[th]e term “qualified direct cost” means * * * the aggregate amount (including administrative expenses) which would have been allowable as a deduction to the employer with respect to the benefits provided during the taxable year, if— (i) such benefits were provided directly by the employer * * *." Link to comment Share on other sites More sharing options...
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