Aggregate Limit using Multiple Use Test

[Guest Mark Manning]

Can anyone tell me where I can review the rules for the Multiple Use Test, a test that applies an Aggregate Limit to the total of the HCE ADP and ACP and must be performed when only the Alternative Test can be used to pass the ACP/ADP nondiscrimination testing? Thank you.

[MWeddell]

If you have a copy of the IRS regulations and like to read primary material, you'll find the multple use limit in Treas. Reg. 1.401(m)-2. Many secondary sources will summarize this as well.

[Guest]

while I agree with the above, many sources fail to mention the ability to 'shift' or use some if not all of the deferrals in the ACP test if permitted by the document. In other words, if an ADP test passes the '2 test' you can 'paper move' the deferrals to the ACP test to possibly reduce the amount of refund.