ACP Failures / SCP

[austin3515]

Is there a window for how far back you can correct an ACP test? If it's failed 5 years can I do SCP? Only affects 1 HCE in all years.

[Lou S.]

Correct me if I'm wrong but I thought to use self correction you had to fix within 2 years of the end of the plan year with the defect. Am I missing something?

[austin3515]

Insignificant can failures can always be corrected under SCP.

[Lou S.]

I guess you have to determine if is insignificant or not.

Some questions in making that determination might include -

Has it failed all 5 years or just once 5 years ago?

Is 1 HCE an insignificant number for this plan?

What is the dollar amount amount involved for all failures over the 5 year period and is it sufficiently small to be considered insignificant?

I don't think the IRS defines specifically "insignificant", isn't it more of a facts and circumstances test.