Pammie57 Posted October 28, 2020 Share Posted October 28, 2020 Client has a side company - one person S Corp. He works full-time for another employer where he contributes $10,500 to his 401k plan. He wants to set up a 401k PSP for 2020 if possible for his S Corp. Would it have to be effective 11/1 or could it be 1/1/2020 but only defer on compensation paid after 11/1? I assume he would be limited to $15,500 (he's over 50) ....Does the plan have to be adopted by 12/31 or before in order for him to defer on his w-2 wages from 11/1? Link to comment Share on other sites More sharing options...
Bird Posted October 28, 2020 Share Posted October 28, 2020 The plan has to be adopted and effective before money is withheld from his pay; that's about all. Luke Bailey and Pammie57 2 Ed Snyder Link to comment Share on other sites More sharing options...
Pammie57 Posted October 28, 2020 Author Share Posted October 28, 2020 Ok good so he can write himself a big ole check and defer from it before year end? . Link to comment Share on other sites More sharing options...
Bill Presson Posted October 28, 2020 Share Posted October 28, 2020 1 hour ago, Pammie57 said: Ok good so he can write himself a big ole check and defer from it before year end? . Make sure he signs/dates an election form prior to doing that. Luke Bailey 1 William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070 Link to comment Share on other sites More sharing options...
imchipbrown Posted October 29, 2020 Share Posted October 29, 2020 Don't forget he can only defer from W-2 wages. Also, 401(k) limit spans employers, though it seems you've considered this in your question. Link to comment Share on other sites More sharing options...
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