Eligible Compensation

[Nassau]

If compensation is earned in the last pay period for the year but not paid until the next year, which year would this compensation fall under?

[Tom Poje]

the famous "What does your document say"

or in particular, what does your Post-EGTRRA Amendment say

here is a sample

(d) _______ Compensation Earned in Limitation Year but Paid in Next Limitation Year. Section 2.5©(2)(E) of the

Amendment defines Code §415©(3) Compensation for a Limitation Year to include any amounts earned

during that Limitation Year but not paid until the next Limitation Year.

Every document I have ever seen always required you to check the item if you wanted to include it in the 'prior' year. If it was checked then it would be included in year earned not paid.

in other wrods, you have to treat everyone the same, following the terms.

Usually it is year check was paid. e.g. if the person deferred the last week of Dec and quit Dec 27 2011, and never worked again in 2012, for personal income tax purposes he would still show with compensation to be taxed and a deferral.

[BG5150]

e.g. if the person deferred the last week of Dec and quit Dec 27 2011, and never worked again in 2012, for personal income tax purposes he would still show with compensation to be taxed and a deferral.

(And perhaps a Safe Harbor contribution!)