Compensation exclusions

[hileman]

Plan excludes several forms of compensation. ADP/ACP is tested on gross less exclusions

HCE has total gross comp of 270,143.14.  14,373.96 is excluded

do you 1. use limit of 265,000 less 14,373.96 excluded and test on 250,626.04

2. use 270,143.14 less 14,373.96 excluded and test on 255,769.18

3 use 265,000 less a prorated exclusion of 9230.82 (14,373.96 less 5143.14 diff between 265000 & actual) and test on 255,769.18

or, is there another correct option that I am not aware of.

 

[ETA Consulting LLC]

No, you must apply the exclusions before you apply the limit.  $255,769.18.

 

Good Luck!

[hileman]

Thank you

as a follow up....  using the 255,769.18 compensation for the adp/acp

would his comp exclusion be 255,769.18/265,000 for 96.52%

or would is comp exclusion be 100% 

thanks

 

[CuseFan]

If you're testing comp definition for nondiscrimination, the inclusion percentage is the 96.52%.