May Job switchers get Multiple Limits?

[Guest JurisPrude]

The 401(a)(17) Limit says that for year 2005, the most compensation that can be taken into account is $210,000. The Sec 415 limit is one-fifth or $42,000.

The Sec 402(g) limit is $14,000.

Can someone work for four employers

ER(1) for Jan to Mar

ER(2) for Apr to Jun

ER(3) for Jul to Sep

ER(4) for Oct to Dec

and

1) get $56,000 worth of elective deferrals for year 2005?

[R. Butler]

No. The 402(g) limit is an individual limit.

[Guest JurisPrude]

What about the 415 Limit, if the person has multiple employers with noncontributory 401(a) Money Purchase Plans -- or ---

if the employer match is RICH RICH RICH say a two fer one

$14,000 Employer Plus

$28,000 Employer

$42,000 [happens to be under the 415 Limit]

Can you Job-switch to another employer [hint, we ae talking about employer employee collusion esp. very small and controlled/closely held]

[R. Butler]

If you have related employers they are treated as a single employer when applying 415 limits.

If they are unrelated employers you have multiple 415 limits.

Its really not clear to me from your hint whether or not there is actually a controlled group, an affiliated service group or perhaps a predecessor employer issue.

[Guest JurisPrude]

Thx, these are potentially interesting abuse issues for IRS investigation

...

On the FLIP-Side, that Job-Switcher making $210 Grand in each job would be paying twice for FICA because the $90,000 Wage Base limit will start from zero with his new employer. Right?

[JanetM]

Right on the Fica. But then they file to get it back at the end of the year. But Employers can't get it back.

[R. Butler]

Thx, these are potentially interesting abuse issues for IRS investigation

Remember if its a related employer situation there is only 1 §415 limit. You haven't presented any real facts upon which to make that determination.

[Guest JimChad]

Also, remember that common control for 415 limit is only 50% (in brother - sister group) not he usual 80%

[Blinky the 3-eyed Fish]

That is not correct. The 50% replacing 80% is for parent-subsidiary relationships, not brother-sister.