I have a dentist with 3 employees who has a SAR SEP plan. He can only defer 125% of the average deferral of his 3 employees I believe. In 2014 he was allowed to defer 5.38% based on this test. He is self employed for taxes.
My question is what his wife is allowed to defer (%) now that she is eligible on 1/1/16.
Can she max out her salary deferrals up to the IRS limit for 2016? Or is she limited by the ADP test since she is the spouse of the owner ? What can she contribute for 2016 ?
Thank you !! The fund companies do not have answers to these kind of questions.