Nondiscrimination - amounts testing

[Guest JM123]

Do matching contributions count when testing profit sharing contributions? I know the match is subject to ACP, but am not sure whether they count as profit sharing contributions.

[Tom Poje]

in this world there are 3 basic types of contribution

elective contributions - (deferrals) separate coverage test, nondiscrim test is the ADP test

matching contributions (match and after tax but not Roth which are deferrals), separate coverage, nondiscrim test is ACP

nonelectives - (profit sharing) sepearte coverage and nondiscrim test (a(4) which is quite often cross tested

now, what confuses people, if a plan fails the ratio % test, it can rely on the general test which includes the average ben % test. this test is the only test that combines everything.

so when you ask if matches are included with profit sharing - the answer is 'yes' along with deferrals if you are talking about the avg ben % test.

but for rate group testing, no they are not included.