Required Quarterly Contributions with Full Funding Credit

[Guest Turtle_01]

When you are calculating the required quarterly contribution amount, do you include a Full Funding Credit?

[Guest Doug Goelz]

No, you determine the required amount as those the FFC did not exist.

See IRS Notice 89-52 Q-4

[Guest Steve C]

Yes, the FFL Credit is taken into account when determining quarterlies. See Q-4 of IRS Notice 89-52.

[WDIK]

Since there appears to be a difference of opinion, here is the reference given by both posters. To each his own interpretation.

Q-4: What is the amount of a quarterly installment? A-4: In general, each quarterly installment is equal to the applicable percentage of the Required Annual Payment ("RAP"). Additional adjustments may be required in the case of a plan with an unpredictable contingent event liability. The RAP for any plan year is the lesser of 90% of the amount required to be contributed to the plan under section 412 for the current plan year (adjusted to the beginning of the plan year) or 100% of the amount required to be contributed to the plan for the preceding plan year. If the preceding plan year was not a twelve-month plan year, the RAP for the plan year is 90% of the amount required to be contributed under section 412 for the current plan year (See Example 3, Q&A-10). The amount required to be contributed to the plan for a plan year ("minimum funding requirement") is the amount necessary to avoid a funding deficiency as of the end of that plan year. This amount is generally determined by reference to the Schedule B filed for the applicable plan year. If the amount required to be contributed is restricted by the full funding limitation of section 412©(7), such limitation is the minimum funding requirement for such plan year. Contributions made for the preceding year are disregarded in determining 100% of the preceding year's minimum funding requirement and contributions made for the current year are disregarded in determining 90% of the current year's minimum funding requirement. An example of the calculation of the amount of a quarterly installment is provided in Q&A-10.

[david rigby]

I'm with SteveC on this one.

[Guest Doug Goelz]

My apologies, my eyes and brain were not working correctly. For some reason, I was thinking I was talking about a credit balance -- which is not taken into account in determining the minimum required amount. I guess that's what I get for answering something on my way out the door to lunch -- my brain left before my body did.

The FFL is definitely taken into account.

Again, sorry for the stupidity.