Non US Citizen in 401k plan

[jmartin]

Facts:

- 401k plan hired a new manager who is not a US citizen. She is working here under a permanent resident card

- She lives in the US

- Her primary source of income, if not her only source of income, is US income

- Taxes are withheld and paid on her us income

- I believe she has a SSN

Question: Can she contribute to the 401k plan?

Note: I looked in the plan document and did not see anything regarding exclusion of resident or non-resident aliens. This plan does exclude hourly employees and that is clearly listed under eligible employee (as excluded)

[MoJo]

Yes. In fact, you can "include" anyone you want, including non-resident aliens (provided they have income from which they can have an effective deferral). Based on what you've provided, there this person isn't in an excludeable class, so unless your plan has some weird exclusion provisions, they must be included, and even if you exclude them, they would have to be addressed in testing.....

[QNPG]

Facts:

- 401k plan hired a new manager who is not a US citizen. She is working here under a permanent resident card

- She lives in the US

- Her primary source of income, if not her only source of income, is US income

- Taxes are withheld and paid on her us income

- I believe she has a SSN

Question: Can she contribute to the 401k plan?

Note: I looked in the plan document and did not see anything regarding exclusion of resident or non-resident aliens. This plan does exclude hourly employees and that is clearly listed under eligible employee (as excluded)

Is the new manager considered an hourly employee? If so, then the answer to your question is no but not for the reason of her being a non-resident alien. If she is considered an hourly employee, she's excluded for that reason.

[Guest Sieve]

This individual is not a "non-resident alien" as defined in the Code, and no doubt would not be excluded from your Plan even if it contained the non-resident alien exclusion (unless, perhaps, she was not subject to income tax due to a treaty)--she is not a non-resident, & she does have US source income.

Therefore, unless (in your case) she is hourly, or is excluded for some other reason (e.g., age or service), then she cannot be excluded without violating the terms of the Plan. You could amend the Plan to exclude her, though, if that is what you want to do--subject to applicable testing requirements.