Coverage Group vs. W-2 Coverage Check Box

[Fred Payne]

W-2s provide for an indication if the Employee is "covered" by a Qualified Pension. This helps the participant to determine if his or her IRA contribution is deductible.

If a Plan allows immediate eligibility to defer in to the 401(k) but has a Year of Service requirement to receive a nonelective or matching contribution, is the Participant who would otherwise be excludable for Coverage Testing of the Employer contributions still considered "covered" when it comes to completing the W-2?

Yes, I know I must still include such a participant in the ADP test.

Thanks.

[Guest Giovanni]

Yes.

[E as in ERISA]

Did the participant make any elective deferrals?

[Fred Payne]

Let's say no.

[Guest Giovanni]

If the participant did not make a deferral, then I change my answer to "no". Sorry, I assumed he was deferring.