ER deductions

[Guest sritts]

We have a 401(k) profit sharing plan that allocates a discretionary profit sharing contribution at the end of the employers fiscal year (ending 3/31/03) for the calendar plan year (ending 12/31/02).

It also has a last day of employers fiscal year employment requirement in order to share in the contribution allocation.

For deductibility purposes, when we look at eligible compensation for the fiscal year, do we look at everyone eligible to participate in the plan or only those participants eligible to share in the contribution allocation?

[ErisaGeek]

Eligible compensation should be of only those participants eligible to share in the contribution allocation and not everyone eligible to participate in the plan.