FishOn Posted September 9 Posted September 9 For traditional tested plans, an ADP test failure can be corrected by recharacterizing excess contributions as catch-up contributions, provided the HCE has not yet reached their maximum catch-up contribution limit for the year. I have not been able to find much, if anything, on the impact of testing failures where recharacterizing excess contributions as catch-up contributions will cause a the catch-up to be recharacterized as Roth for those that are HCEs who are also High Income Earners. If the HCE (is also HIE) made only pre-tax contributions, will recharacterizing excess contributions to catch-up mean that we have to do a Roth Transfer for the catch-up portion?
C. B. Zeller Posted September 9 Posted September 9 See this thread from yesterday: FishOn 1 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
FishOn Posted September 9 Author Posted September 9 Would the plan adoption agreement need to have In Plan Roth Transfers selected in order to accommodate the recharacterizations of catchups for HCEs who are also HPIs?
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