John Feldt ERPA CPC QPA Posted February 7, 2008 Posted February 7, 2008 A profit sharing 401(k) plan has an option for participants to defer under 401(k) - based on all taxable W-2 wages. The plan also has a CODA option, which allows participants to take some or all of the company "profit sharing" as cash instead. I must have been working on DB plans and the why's and what's of a CODA plan slipped by me. What is the advantage of having a true CODA vs normal 401(k) deferrals - or are they considered to be the same thing? Are there any differences, like FICA taxation, what amounts count for testing, etc?
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