Guest Jhagan Posted May 28, 1999 Posted May 28, 1999 What is the amoun tof excess contribution to be refunded to HCE Part. A: The total amount of excess contribuiton that must be refunded is $4,700. HCE deferrals: HCE A 9,500 HCE B 8,600 HCE C 4,700 Answer is 2,800. Need explanation.
david shipp Posted May 28, 1999 Posted May 28, 1999 reduce highest dollar contributor first and bring him/her down to next highest -reduce A by $900 reduce next two on a dollar for dollar basis until you either use up excess or get to the third person in line. - reduce A and B by 1/2 of remaining excess since that eliminates excess before getting to C. So - A's reduction = $900 + 1/2(4700 - 900) = $2,800.
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