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Catch-up contributions included in ADP/ACP tests?


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Posted

Can someone let me know if catch up contributions are included in the adp/acp test.

Guest Giovanni
Posted

No, catch-up contributions are not used in the ADP test. In 2002, if an employee deferred $12,000.....only $11,000 is used in the ADP test.

Posted

Thank you for the response.

Posted

However, if an HCE did not exceed the 402g limit or the 415 limit, then the entire deferral IS included in ADP. The catch-up is only recharacterized after the test is performed and it will then reduce the amount of the refund.

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