Will a non-owner employee newly hired in the current year ever be a HCE for the current year?

[Ken Davis]

Will a non-owner employee newly hired in the current year ever be a HCE for the current year? Given the wording of the statute (requires compensation in the preceding year) I don't think so, but thought I'd ask the experts.

Thanks,

Ken Davis

Univ. of South Alabama

[rcline46]

They can become an HCE if:

They purchase or have option on more than 5% of the stock;

They marry a 5% owner (direct, no double attribution);

They are adopted by a 5% owner.

That's about it.

[GBurns]

What sort of 403(b) eligible entity is this in which you can become an owner?

[Ken Davis]

GBurns:

I think rcline46 was answering my post from a broader view, without restricting the answer to 403(b) plans. Possibly I should have posted to another forum that could answer general questions, but I couldn't find one. Is there another such forum available?

Ken Davis

[rcline46]

GBurns was correct that I did not notice it was a 403(b) posting. However, I have seen incorporated not-for profits claiming 501©(3) exemption. Also note that the question mentions non-owners (which is what I keyed in on).