Key employee Determination (1% owner)

[jquazza]

I am having an argument with some coworkers, maybe I can find someone to settle this for me...

A is a 1% owner with comp in excess of 150k. A is a key employee.

A's wife, works for the company as well and earns 30K. She is a 1% owner by attribution, now, because her comp is under 150k, I do not consider her a key employee.

Am I missing something here?

[Tom Poje]

maybe. what was her status a few years ago? if she was considered key a few years ago, she might be a 'former key' now, which means you would ignore her balance entirely when determining top heavy status for the plan.

[Guest quinn the car fixer]

she isn't being attibuted any of the other 99% b/c mother or father?

[jquazza]

No, she isn't attributed any other ownership and I am aware of the former key exclusion for the top heavy ratio. Being a former key doesn't preclude her from getting a top heavy minimum contribution this year though.