Employees in two different ESOPs that are members of a controlled grou

[Guest SRH]

Two companies are members of a controlled group. Each company has an ESOP with different plan years. Three employees receive compensation from both companies and are eligible to participate in both ESOPs. These 3 employees receive less than $60,000 each from Company A. The same 3 employees receive in excess of $100,000 each from Company B. Can these employees be considered NHC's in the Company A plan and HC's n the Company B plan?

[RLL]

Hi SRH ---

No.....For purposes of IRC section 401, all employees of all members of a controlled group of corporations are treated as employed by a single employer, per section 414(B).