PAYSOPS

[Guest TAS17]

I am confronted with a profit sharing plan with a frozen PAYSOP portion. What provisions of the Code apply to the PAYSOP? Are the provisions applicable to PAYSOP's identical to the provisions applicable to TRASOP's?

[RLL]

A PAYSOP is a payroll-based tax credit ESOP. That tax credit was available during the period 1982-86.

A TRASOP is a Tax Reform Act (of 1975) investment tax credit ESOP. The additional investment tax credits were available during the period 1976-81.

Both the PAYSOP and the TRASOP are subject to the same tax credit ESOP requirements of IRC Section 409, as well as the general qualification requirements of Section 401(a).