Guest dbvail Posted February 8, 2007 Posted February 8, 2007 I should know this, but brain cramping. HCE (over 50) contributes only $5,000 as deferrals. The other HCE goes big. Plan fails ADP and refunds are indicated. Client then asks for max PS calc, so we solve for the 50 year old to get $44,000. Voila! The 415 violation that has been created means his deferrals are all now 'catch up', and when the ADP test is then run it passes. I do not recall there being any order of precedence in running tests, so this should work. Does anyone have thoughts to the contrary?
Blinky the 3-eyed Fish Posted February 9, 2007 Posted February 9, 2007 True, a catch-up is triggered if at the 415 limit, but it is also triggered by a failing ADP test. So, no voila, you were already there. "What's in the big salad?" "Big lettuce, big carrots, tomatoes like volleyballs."
Mike Preston Posted February 9, 2007 Posted February 9, 2007 At ASPPA Annual 2006, government representative indicated that they had some kind of problem with a catchup being created by timing of the PS contribution being made after the deferral. BTW, Blinky, if other HCE had larger deferrals than $5k, adp correction involves turning othr HCE deferrals into catch-ups, not this HCE. Therefore, not "already there." I don't see how the government position squares with the catch-up reg. I think the catch-up reg is consistent with Voila!, though.
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