HCE Determination

[Guest le190]

I have an employee who is a 24 year old, hourly employee. His residence is with his mother, who is a 7% stockholder in our company. The stockholder is salaried, making less than $80k each year, and does not defer salary to the plan. Since family aggregation no longer applies in this case, is it possible that family attribution might in determining whether the 24 year old is an HCE? Any help is greatly appreciated.

[Richard Anderson]

He is an HCE. He is attributed the ownership of his parent. He therefore is a greater than 5% owner and an HCE.

A participant is an HCE if either of the following is true:

1.a greater than 5% owner in the current or lookback year, or

2.greater than $80,000 comp in the 12 months prior to the current plan year. months.

[david rigby]

the point of the above response is that, although family aggregation has been eliminated, family attribution has not.