Section 105

[Randy Watson]

Is it premissible to exclude leased employees from the tests under Section 105? They are not specifically mentioned in the regs, but I was wondering whether there was anything out there that includes or excludes them. Thanks.

[Kirk Maldonado]

My recollection is that the section 105(h) regulations predate the enactment of the leased employee ruels.

[Guest b2kates]

I do not believe that Code Section 105 was conformed to adopt the definitions in Code Section 414(n); therefore, leased employees would be excluded from the 105(h) testing; but be careful that they do not fall within the independent contractor rules that would catagorize them as employees.

[leevena]

If you are leasing employees, they are not yours...correct? If they are not yours, why would you worry about 105?

[GBurns]

That is the big problem .. Who is the employer?

Are you the common law employer? Are you a "co-employer"? What is "leased"?

Some people have different meanings to the term "leased". Are these through a "temp" agency such as Kelly or are they through a PEO? How long are they/have they been "leased"? Who issues the W2?

You might need some more clarification as to what their status is, so as to make a better decision.