Question about Top heavy exemption for SH Plan with Dual eligibility

[Jim Chad]

My question is am I still exempt from Top Heavy requirements under the following circumstances: Dual eligiblity in this case means 30 day wait to defer and 1 year of service to receive 3% SHNEC

1. I have dual eligibility. Does that take me out of TH exemption all by itself?

2. I have dual eligibility and I pass coverage by testing separately those with less than one year of service. Am I exempt from TH?

3. I have dual eligibility and I pass coverage testing all employees as one group. Am I exempt from TH?

[Tom Poje]

if you are not providing the safe harbor to the otherwise excludables then you have taken it out of top heavy free.

otherwise I'm not sure why you are testing coverage separately, unless you are providing additional contributions, which also takes it out of top heavy free.

as to using date of entry comp, well, it depends on which IRS official you ask. some (ok at least one very picky individual) would say it takes it out of top heavy free, others say it is still top heavy free