Profit sharing contribution made to safe harbor 401(k) Plan

[Guest Theresa]

Question concerning additional profit sharing contribution made to a safe harbor 401(k) plan. We have a client looking at setting up a safe harbor 401(k) plan. The owner would like to max out at $30,000. He is maxing out his deferrals at 10,500 and he gets an additional 3% safe harbor. In order for him to reach the max how is the profit sharing contribution allocated? Before they had a cross tested plan (profit sharing). I guess I'm confused on how the additional works so that he gets the majority of the profit sharing contribution.

[Guest Mr. X]

The 3% nonelective contribution required because it is a safe harbor plan can still be cross-tested. The only difference is you may not impute permitted disparity on this amount. Therefore, while you may need to amend your document, the same results should be achieved as in the past.