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Coverage Group vs. W-2 Coverage Check Box


Fred Payne

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Posted

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
Posted

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

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