Michele F

I am having a similar issue and want to make sure that I am doing this correctly. The definition of compensation is W2 compensation; nothing is excluded from the of W2 compensation. Box 1 wages if $155,860.89; and Box 3 and 5 are $159,011.47. The S Corp health insurance is $20,359.42, the salary deferral is $23,500; and the Roth deferral is $11,250. If I am reading all this correctly, then the compensation that I am using for plan purposes calculations is $179,360.89. $155,860.89 + $23,500.

That was my understanding as well. Thank you for clarifying.

The 401K plan was adopted for the plan year starting in 2024. It did not pass the ADP testing. If they adopt the 4% safe harbor contribution now, do they still need to make a top-heavy contribution to the plan? Only 2 of 3 owners made salary deferrals, and 1 of 4 rank-in-file employees made a salary deferral. I cannot find a definitive answer, and was hoping to see what others are doing in this situation. FYI... I did not set this plan up, and it is a possible takeover plan.