Puerto Rico employees

[jaemmons]

Plan covers employees who are also subject to Puerto Rico tax law. Since these employees are not able to make catchup contributions under Puerto Rico law, does this mean that when they are tested in the US plan (US plan allows for these contributions), they cannot have catchup contributions apply to correct any excesses (e.g. - adp refund, plan limit excess)?

[MWeddell]

I think the answer is no. Sounds like your plan has to meet both 401(k) and 1165(e) rules, which often conflict, not a good idea. However, it's entirely possible for the same dollars to be considered as catch-up contributions under the U.S. IRC because they exceed the plan's ADP limit but still be considered as regular elective deferrals under the P.R. IRC.