Husband & Wife Solo PS Allocation

Very simple question...

Husband and wife cpa business.  Both HCEs.  When they make the PS contribution do each of them have to receive the same percentage?  As long as the 415 limit isn't exceeded can we do that?  

That's going to depend on the allocation rules in the document.  It should say how to split a contribution, or whether the employer determines individual specific amounts by individual classes.

Like a new comp?

3 hours ago, Basically said:

Like a new comp?

No, as in does the document say they can be different or not?   

Well, inasmuch as such a plan with individual allocation classes "typically" has to cross-test.  Your plan might not need to test, but it can't run afoul of the document's allocation rules.

Maybe there's an out if you're stuck with pro rata, but the higher paid person hits 415 first such that the rest of the contribution has to go to remaining participants

8 hours ago, Basically said:

Very simple question...

Husband and wife cpa business.  Both HCEs.  When they make the PS contribution do each of them have to receive the same percentage?  As long as the 415 limit isn't exceeded can we do that?  

Simple answer - Read the Plan Document.

it is not just 415, it is a deductibiltiy too.  If your Plan Document says "do whatever you want" (aka each participant in their own group) then you can do whatever makes sense.  If yoour document is not flexible, you follow the Plan Documnt terms.

Also need to check what the top heavy requirements are as if the keys are required to get top heavy, some minimums may need to be allocated. As all above,  the document's allocation requirements need to be checked.