Deductibility of PS and mid-year entrant comp

[BG5150]

When calculating the covered comp for the 25% deductibility, do you use pay as a participant or full year pay for mid-year entrants and when benefits are calculated on partial year pay?

For example, participant paid $50,000 in 2016, but entered the plan on 7/1 and made $25,000 thereafter.  PS is 5% of $25,000.  Am I using $50k or $25k when calculating the max deductible tot he ER?

[ESOP Guy]

You can use full year comp has always been my understanding. 

[Mike Preston]

I believe you use full fiscal year comp.  Obviously, when plan and fiscal year are the same then it matters not.