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Posted

Here is a good one:

Safe Harbor NEC plan.  Plan does an additional match of 25% up to 8% of compensation.  So ACP testing is required.

Question:  Can you run an ADP test (assuming it passes) and the run the ACP test with borrowing from the ADP side?

Posted

Good try, but nope. You can only borrow from the ADP test if the 401(k) plan is actually subject to the ADP test. 1.401(m)-2(a)(6)(ii)

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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