So, in January 2018, someone sends 2017 data and asks you to do Dependent Care Assistance Plan testing. They pass the "5% owner" test, but fail the 55% Average Benefits" test." Let us suppose that the HCEs' average benefit amount was $1,000 and the NHCEs' average was $300. I'm being told that as long as it is "corrected" by the time the W-2's are done, that instead of the entire HCEs' amount being considered taxable income, you can just count the excess over what "would have" passed. So, for example with a $300 NHCEs average, if the HCEs average had been $545 (I'm rounding here) then it "would have" passed, and therefore the HCEs' taxation on the DCAP will only be amounts in excess of $545. Is this approach "blessed" anywhere in IRS guidance?

[Advert.]

We are happy to announce the launch of our new and improved website! Check out our updated product pages, customer testimonials, Sales Rep Finder, Request a demo, and more!

I have a former client that established a nonelecting DB church plan. The plan was never restated for PPA. How can I refer the client to a qualified firm to both do the restatement and also file under EPCRS?