SAR SEP ADP Test - Family Aggregation

[rfahey]

Owner has wife on payroll in company with old SAR SEP plan. The ADP for the NHCE group is 2%. How are the owner and his wife computed for the test. His w-2 is 80,000 and hers is 10,000.

Also what if their 2 kids are eligible and also on the payroll and each of the kids make $5,000. How is that factored into the test ?

PS where can you find data on this family attribution area ??

[Gary Lesser]

Although the family aggregation rules were repealed by the Small Business Job Protection Act of 1996 (SBJPA). The definition of 5 percent owner as amended, however, requires family attribution under Code Section 318. (The definition of a 5 percent owner in Code Section 414(q)(2) refers to Code Section 416(i)(1), which in turn refers to the attribution rules of Code Section 318.)