Off-Calendar PYEs again

[TPAnnie]

Hi, my brain's not working and I'm going around in circles, so I'm wondering if someone could verify my #'s before I call my attorney client and get myself in trouble:

Plan is 5/1/06 - 4/30/07

Comp limit = $220,000

402g limit = 15,500 (or $20,500 for aged 50+)

Annual Addition max = $45,000 (or $50,000 for aged 50+)

HCE = comp > 95K 5/1/05 - 4/30/06 (doc does not use calendar year comp)

thanks!

Annie

[austin3515]

Comp is plan year beginning (i.e. 2006 limit applies)

SS wage base (For integrated plans) is plan year beginning (i.e. 2006 limit applies)

415 is plan year ENDING (i.e., 2007 limit applies) (it's the only limit that's plan year-ending).

With respect to 401k contriubtions, that is always the calendar year, and never the plan year. And that is what makes ADP testing (in light of catch-up contriubtions) so much...fun?

[TPAnnie]

Ok, so my guy (who's <50 yoa), who deferred $16K for the plan year 4/30/07 (and $14K for plan year 06) would have been ok had he deferred at least $500 of it during calendar year 06 and no more than $15,500 of it during calendar year 07, right?

But, since he deferred the full $16K during the calendar year 07, he's over on his 402g limits by $500? Did I think this all through correctly?

I just thought of another question...what if he had deposited the full $16K in December 2006? Assuming no other contributions during 06, is he over 402g limits in the amount of $1000?

thanks!

Annie

[austin3515]

Your first paragraph has the dates a little skewed, so I'm not sure what you're saying there.

But in your second paragraph, the answe yes, if someone exceeded the maximum allowable contribution of $15,500 during calendar 2007, yes they went over the 402(g) limit for calendar 2007.

In the third paragraph the answer is yes for the exact same reason.