Include on Coverage?

[fiona1]

For 1/1/04 to 12/31/04 testing,

Participant termed in October of 2003. They received stock options that was paid to them in 2004 - and they were issued a 2004 W2 for that amount.

Does this person need to be included in the Total Participants for coverage?

Thanks for any help.

[rcline46]

coverage is for employees, so the question is, was that person an employee in 2004?

Pay amounts, types, etc are not relevant.

[austin3515]

You need to look at the definition of comp. 401(k) is definitely out, but my understanding is that with profit sharing it's a bit grayer. If you use W-2 comp, and this item isn't excluded (although I think it generally is, something about Sect. 83 property?), then it's a definite maybe...

These post-"termination" payments are always an interesting topic!