Guest psb Posted February 6, 2003 Posted February 6, 2003 When a plan fails the healthcare concentration test how do you report the excess contributions made by the HCE? I know with a retirement plan a 1099 R is used but I am not having any luck finding out what reporting mechanism is used for FSA testing failure. Any help will be greatly appreciated!
papogi Posted February 13, 2003 Posted February 13, 2003 I wanted to point out that if a 125 plan fails the 25% Concentration test for key employees, then all key employees are to be taxed on their option to receive cash in place of non-taxable benefits (notice it’s not really HCE’s, although they often are key). My guess is that a 1099 is appropriate.
Kirk Maldonado Posted February 13, 2003 Posted February 13, 2003 I disagree; I think it should be included in the employee's W-2. Kirk Maldonado
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