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Showing results for tags 'HCE determination'.
Found 3 results
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For 2014, a plan's definition of 415 compensation was W-2 wages. The plan was restated 1/1/2015, and elected 3401(a) for 415 compensation. To determine HCEs for 2015, which year's definition of 415 compensation is applied to the lookback year? I believe it is the 2015 definition. 414(q)(4) simply states 415©(3) compensation is used to determine HCEs, and Notice 97-45 clarifies the determination year & lookback year periods, but I find nothing that addresses the effect of a change in the definition of 415 comp. If I think about a new, start-up plan, HCEs would be determined based on the plan's "new" definition of 415 compensation, applied to the lookback year preceding the adoption of the plan. Can anyone confirm/clarify? Thank you in advance!
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I am assuming that non-profit organizations have no individual owners. I have a possible new client the founder (HCE) of which has a daughter also working in the organization. The daughter does not and has not earned over $115,000 in any years, yet they are both treated as HCEs on the TPA's discrimination testing. Is the TPA somehow viewing the founder as an owner and then attributing that "ownership" to the daughter incorrectly? Thank you!
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Bill, the 50% owner of the corporation, buys the other 50% from his sister Mary in mid-2009. He does not have enough cash to do this, so his sister holds a promissory note (more on this later). The company has a calendar year 401(k) plan. Mary is an employee and is still an HCE in 2010 due to her prior ownership. Mary did not retain any repurchase rights, but she held liens/collateral interest in her company shares, the building, some land, etc. as security for the promissory note from her brother since he did not have the cash to pay for her shares outright. Mary's wages have always been only about $50,000 per year so she is not an HCE due to wages. Is Mary an HCE in 2011? Is Mary an HCE in 2012?
