pmacduff Posted January 8, 2008 Posted January 8, 2008 ok- back to basics...I'm starting to forget everything including my name and it's only Jan. 8th!! Anyway I have a client with some partners who "own" less than 5% (all partnership percentages are coded in the system). The 2006 compensation for these particular partners was less than $100,000 (but not by much). When I run the ADP test on the plan, they are not showing as HCEs in 2007. (They might possibly "help" the ADP test if they were in the upper group.) They are in the top 20% in 2006 for 2007; shouldn't they be HCEs in 2007? I think I have everything coded properly in the system..... any help appreciated!!
WDIK Posted January 8, 2008 Posted January 8, 2008 As evidenced by recent posts, my memory is also suspect. However, it is my understanding that invoking the top-paid group rule allows you to exclude individuals from the HCE group that might otherwise be so classified. Even is someone is in the top-paid group, they must still satisfy one of the other definitions of an HCE. ...but then again, What Do I Know?
Tom Poje Posted January 9, 2008 Posted January 9, 2008 to be an HCE in 2007 you would have to make 100,000 in 2006 or be a 5% owner in 2006 or 2007. it doesn't sound like that criteria was met.
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