R. Butler Posted September 18, 2001 Posted September 18, 2001 I know that under current law that if an employee does not render services to the employer at any time during the five year period ending on the determination date his/her balance is disregarded from the top heavy test. We have a situation where the owner of an s-corp took herself off the payroll five years ago. She still is somewhat involved in daily operations, she just doesn't take a salary. Can we exclude her from the top heavy test?
david rigby Posted October 2, 2001 Posted October 2, 2001 My read of the top heavy regs. finds the phrase "perform any services". Several uses of this (or similar) phrase. I did not find a reference to W-2 or to being on the payroll. My conclusion to your question is "no." I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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