DPL Posted October 5, 2017 Share Posted October 5, 2017 Company has 401k plan and an ESOP with 10/31 yearends. Plan year is limitation year. Age 60 Participant defers 22,000 in calendar 2015. None recharacterized as catch up on the 10/31/15 ADP test. $2000 of that amount was deferred in Nov and Dec 2015. In 2016, participant defers 16,000 from 1/1/-10/31/16. 415 additions from both plans = $63,000. How much can be called "catchup" and not be subject to 415 correction? $6,000 or $8,000? Link to comment Share on other sites More sharing options...
Mike Preston Posted October 5, 2017 Share Posted October 5, 2017 1 hour ago, DPL said: Company has 401k plan and an ESOP with 10/31 yearends. Plan year is limitation year. Age 60 Participant defers 22,000 in calendar 2015. None recharacterized as catch up on the 10/31/15 ADP test. $2000 of that amount was deferred in Nov and Dec 2015. In 2016, participant defers 16,000 from 1/1/-10/31/16. 415 additions from both plans = $63,000. How much can be called "catchup" and not be subject to 415 correction? $6,000 or $8,000? How is the bolded language possible with $20,000 deferred from 1/1/2015 - 10/31/2015? What period is covered by the $63,000? Others may want to chime in with suggestions when questions are not fully formed. I usually don't. Link to comment Share on other sites More sharing options...
ESOP Guy Posted October 6, 2017 Share Posted October 6, 2017 The only way I know how to do this right is chart it out in a spreadsheet. You need to keep straight the Annual Additions are plan year based and the 402g limit is always a calendar year limit. 1) So you make the first cell in your spreadsheet 1/1/2015 to 10/31/2015 deferrals. 2) Next is you need a cell that is 11/1/2015 to 12/31/2015 deferrals. 3)You next need a 1/1/2016 to 10/31/2016 deferrals in a cell. 4) You need 11/1/2016 to 12/31/2016 deferrals in a cell. 5) Since you are asking for PYE 2016 Annual additions you need all annual additions beside 4k in the last cell. A) 1+2 = is what is compared to 402g for 2015. Was there any catch up in 2015. If so, we tend to treat them as being part of 2 so it is in the current plan year. I am not sure I can give you a cite. I have been doing it that way for a long time. B) 3+4= is what you compared to 402g for 2016. Same assumption it is 4 where there is it went over the limit 5+3+4= Total Annual additions for PYE are you over 415 limit? If so, is there any room in catch up from B as we tend to use that same thing we use PYE to decided what calendar year to do the shift. I hope I did that right. We have a standard spreadsheet around here we use. I am not sure I can give cites on using those end of the year of PYE as the point the overage happens but we are consistent on it and doing for a very long time. Link to comment Share on other sites More sharing options...
Tom Poje Posted October 9, 2017 Share Posted October 9, 2017 ESOP Guy Line 3 above needs to be edited as those dates are impossible unless you have powers beyond things I understand. (one of your rare typos, maybe the first I have noticed) I assume it should be 1/1/2016 to 10/31/2016 ESOP Guy 1 Link to comment Share on other sites More sharing options...
ESOP Guy Posted October 9, 2017 Share Posted October 9, 2017 Thanks Tom Link to comment Share on other sites More sharing options...
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