shared employee

[Draper55]

Situation is as follows:

1.Three solo PAs(A,B,&C) that equally own another PA(D) that does billing and clerical work for all three PAs. No common ownership among A,B&C. A has a 401(k) plan;B and C do not. D has one NHCE  employee. If the NHCE of D is a full time ee he/she will need to be covered under A's Plan as it would seem to be an ASG. Are either of the following acceptable to avoid covering the NHCE in A's plan. i)Put the NHCE on B's payroll and just have A pay B for clerical work, ii)have the NHCE part time on A's payroll and part time on B's payroll so that A does not have to make employer contributions for the NHCE provided the NHCE works less than 1,000 hours for A.

Any thoughts or possible solutions are appreciated.

[Luke Bailey]

On ‎2‎/‎6‎/‎2020 at 4:09 PM, draper1 said:

have the NHCE part time on A's payroll and part time on B's payroll so that A does not have to make employer contributions for the NHCE provided the NHCE works less than 1,000 hours for A

draper1, this would not have worked (because time would have been aggregated) under "shared employee" rule in proposed regulations under IRC sec. 414(o). The proposed regulations were never finalized and eventually were withdrawn. You can draw whatever inferences from that you think appropriate.