Recharacterized Deferrals as Catch-Up and 415 limit

[Guest darrensoup]

If we have an HCE who is over 50 defers $15,000 in 2005. He has 1,000 402g catch up and $3,000 as a recharacterized catch up due to a failed ADP test. Would this HCE be eligible to receive in total contributions a total of $46,000. This would be 42,000 415 limit plus 1,000 402g catch up plus 3,000 recharacterized ADP catch up.

[Lori H]

i believe that to be the case as elective contrbutions but not including elective contributions that are catch up are considered annual additions under irc 415

[Guest darrensoup]

We are under the impression that recharacterized catch-up due to failed ADP test is not included in the 415 limitation calculation.

Does anyone else have a response to my original Post?

[Leopurrd]

you are correct - any deferrals characterized as catch up are above the 415 limit. deferrals can be recharacterized when they exceed the 402g or 415 limit, or when you have an adp failure.