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Is a non employee owner an HCE?


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Posted

For purposes of the ACP test, is a non employee owner, who participates in the active day to day mangement, considered an HCE?

What if they are NOT actively participating in the day to day management of the company?

What if they are married to a paid HCE employee?

What if they are married to a non paid HCE actively participating in the day to day management of the company?

Thanks.

Posted

All of this boils down to one thing: compensation. Does this individual get any? If the answer is "no", then that person doesn't count in the ADP test. Does that clarify things?

Posted

If he is not an employee of the company he is not in the plan so he is not in the test. If he is being paid he is an employee and if he is in the plan he is in the test.

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