Non-resident aliens

[Guest Pat Metallic]

A client excludes non-resident aliens from their retirement plan. There is a "substantial presence test" which states that if an individual is present in the United States for at least 183 days over the current and preceding 2 years that that individual would be redefined as a resident alien. If that is true, that individual would need no longer excludible from the plan.

Is that a correct analysis? Any comments?

[JDuns]

You are correct that resident aliens would not be excluded based on the exception you described and must be counted as non-excludable when performing various non-dicrimination tests. However, an employer may be able to exclude these employees from plan participation if the plan coninues to pass the necessary coverage tests.