Doghouse Posted February 1, 2018 Posted February 1, 2018 I am working with a plan that defines plan compensation as 3401(a) compensation. The plan covers a couple of Puerto Rican residents/participants. Their compensation is reported to Hacienda. Does this compensation constitute 3401(a) compensation? We're trying to do some clean-up and want to determine if we have an issue on the U.S. side. Thanks to any who can help! Dog
Bird Posted February 1, 2018 Posted February 1, 2018 We're working on something similar and I'm thinking that comp is not plan comp for a US plan. Will let you know if we learn otherwise. Ed Snyder
Doghouse Posted February 1, 2018 Author Posted February 1, 2018 Thanks, Bird! I was leaning in the other direction but it sure is difficult to find something on point.
Bird Posted February 2, 2018 Posted February 2, 2018 We asked our document provider, FTW, and were told that our plans definitely do not qualify as Puerto Rico qualified plans. At least for deferrals, they would NOT get the benefit of a pre-tax deduction for income reported to Hacienda. I have to believe any/all of that income is not US income and not eligible for any US plan purposes. Ed Snyder
shERPA Posted February 3, 2018 Posted February 3, 2018 It is PR's IRS. I carry stuff uphill for others who get all the glory.
Doghouse Posted February 5, 2018 Author Posted February 5, 2018 I spoke with an attorney in Puerto Rico and he agrees with Bird on the compensation issue. However, that doesn't make it any easier to fix (this has been going on for years).
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now