legort69 Posted March 13, 2021 Posted March 13, 2021 EE gross comp is $2000. They contribute $1900. What is their ADP rate using net comp? Is it 1900/$100?
C. B. Zeller Posted March 14, 2021 Posted March 14, 2021 Yes. If they employee had any deferrals under a 125 plan, don't forget to subtract those out as well. 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
legort69 Posted March 14, 2021 Author Posted March 14, 2021 Then it just takes one NHCE to exponentially bump up the ADP rate and pass the test. Seems like a loophole in the rules.
BG5150 Posted March 15, 2021 Posted March 15, 2021 But how many NHCE really defer at such a rate? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
legort69 Posted March 15, 2021 Author Posted March 15, 2021 I have a plan that has 100's of NHCEs and just a few contribute in proportion to the population. Then there is this one NHCE who contributes 1500% using net comp and the plan passes primarily due to his rate. it could be the owner's child-in-law as far as i know, but it seems like a way to gain the system.
C. B. Zeller Posted March 15, 2021 Posted March 15, 2021 Sometimes it works out that way. Of course, sometimes the owner is paying their spouse $20,000 and they are deferring $19,500 of it, so it works both ways. 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
ratherbereading Posted March 16, 2021 Posted March 16, 2021 20 hours ago, legort69 said: I have a plan that has 100's of NHCEs and just a few contribute in proportion to the population. Then there is this one NHCE who contributes 1500% using net comp and the plan passes primarily due to his rate. it could be the owner's child-in-law as far as i know, but it seems like a way to gain the system. **game** the system Bill Presson 1 4 out of 3 people struggle with math
BG5150 Posted March 16, 2021 Posted March 16, 2021 47 minutes ago, ratherbereading said: **game** the system You said what I was thinking. LOL QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
ratherbereading Posted March 16, 2021 Posted March 16, 2021 7 hours ago, BG5150 said: You said what I was thinking. LOL I couldn't help it ... 4 out of 3 people struggle with math
FPGuy Posted March 16, 2021 Posted March 16, 2021 Wouldn't an owner's kid be an owner/HCE per 318 attribution?
Mike Preston Posted March 16, 2021 Posted March 16, 2021 7 minutes ago, FPGuy said: Wouldn't an owner's kid be an owner/HCE per 318 attribution? child in law was discussed, not child.
BG5150 Posted March 17, 2021 Posted March 17, 2021 17 hours ago, Mike Preston said: child in law was discussed, not child. Not unless officially adopted, right? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
Mike Preston Posted March 17, 2021 Posted March 17, 2021 2 hours ago, BG5150 said: Not unless officially adopted, right? The opposite? Not if officially adopted.
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