ACP Test - One-to-One Correction Method

[KMMB]

This employer is correcting failed nondiscrimination testing for a prior plan year using the one-to-one method under Revenue Procedure 2013-12, Appendix B, section 2. When allocating the QNEC to eligible NHCEs should the employer use the plan's definition of compensation for the year of the failure or total compensation for the year of the failure? IRS guidance does not appear to address this specific question (the revenue procedure merely states it must be a uniform allocation as a percentage of compensation).

[Kevin C]

The current EPCRS Rev. Proc. is 2019-19, but it doesn't look like there were any changes to that correction method.  I think either compensation definition would work.  Although, if the plan definition doesn't satisfy 414(s), I think I would lean towards using total [415(c)] compensation.