Foreign National who pays US Taxes participate in 401(k)

[Guest bueler]

1. Can a foreign national (not a citizen) in this country on a Visa who has a social security number and pays US taxes participate in a 401(k)plan (he has no greencard)?

[Guest Mbrockway]

How does the plan define an eligible employee? You may want to check on the definition of nonresident aliens also.

[rcline46]

He/she would appear to be a RESIDENT alien WITH a source of US income. So unless they can be excluded for some other reason in the document (interns, etc) then they must be counted as a non-excludable.

[Alf]

Foreign national living in this country = resident alien, so the vast majority of plans would require their eligibility unless this category was specifically excluded and the plan passed 410 coverage testing without excluding this group.

[Guest bueler]

The plan establishes eligibility as an eligible employee that has satisfied the eligibility requirements except those check" Collectively bargained employees, and employees who are nonresident alients who received no earned income (within the meaning of Code 911(d)(2) from the Employer which constitutes income from sources within the US (within the meaning of Code 861(a)(3).

Plan uses a standardized document and above is the eligibility classification for our plan which includes those exceptions.

Below is the definition of the Non-resident alien...

What is the Internal Revenue Code's definition of a non-resident alien?

According to the Internal Revenue Code, a foreign national qualifies as a non-resident alien for U.S. federal income tax purposes with respect to a particular calendar year when the foreign national is neither a citizen of the U.S., nor a resident alien of the U.S.

(This definition may answer my question in that the individual would not be eligible.)

[MGB]

It sounds like you are confusing NON-resident with resident alien. If they are working here, they are not excluded due to their alien status.

[jquazza]

You seem to be missing the point, you can exclude non-resident aliens with no US source income. Your individual might no be a resident alien. I am not so sure about that definition, does he need a green card to be considered a resident or are you considered a resident if you have a visa-work permit? It seems you might be considered a temporary resident (as opposed to green card holders who are permanent residents.)

At any rate, in your case, the individual seems to have US source income, hence he is not excludable for 410(b).