Executor(trix) Fees

[Guest David B]

Are Executor(trix) fees considered earned income which can be considered compensation for qualified plan purposes?

[K2retire]

Not an official response, but when I researched it in 1992 there was conflicting information.

If the executor fees are reported on a Schedule C and self employment tax is paid, they should qualify. However at that time there was an exemption (that could still exist, I haven't needed to know since then) that said that self employment tax did not have to be paid on executor fees. In that case, the income would not count for plan purposes.

I paid the SE tax and spread the income over 3 years so that I could contribute the 415 limit to a MPPP each year.