Maximum EE contributions

[Guest Charlie]

A doctor is employed by two unrelated corporations maintaining qualified plans. His compensation from each would enable him to have a $30,000 maximum contribution made on his behalf from each. Can this be done?

[actuarysmith]

If the doctor is an employee and has no ownership interest in either employer, and the two employers are not related in anyway, then the fortunate Doc. can receive a full $30,000 in each plan.

If any of the facts are different - the answer may change.

[David]

Question. Why is it no interest in either employer? What if he was an owner of one business and an employee with zero ownership in the other (unrelated) business?

I know there are guidelines on these types of situations and I would like to get up to speed, for instance, what about a Dr. that has his own practice and also teaches at a not-for-profit institution?

Any cites or references would be appreciated.

[actuarysmith]

I was trying to keep it simple stup.................. (I mean no offense, I was just reiterating the acronym)

If the doctor had no ownership in either company, then it would be impossible to run into the controlled group rules. If the doctor had ownership in one group, no ownership in the other and was an employee with earned income in both, then the doctor could still benefit under both plans.

For a more complete discussion of the rules, please refer to the code and regs regarding commonly controlled groupl or businesses.

In very simple terms, if the SAME 5 or fewer owners have more than an 80% overlap in ownership between two firms, then they are considered a controlled group. If this is the case, then the groups must be aggregated for certain coverage and testing rules, AND a participant working for both employers could only get a single $30,000 allocation.