Changes

Jump to: navigation, search

Highly compensated employee

4 bytes removed, 15:00, 29 October 2017
m
No changes to limits for 2018
According to the IRS, a highly compensated employee is an individual who:
*Owned more than 5% of the interest in your business at any time during the year or the preceding year, or
*For the preceding year, received compensation from you of more than $120,000 (if the preceding year is 2016 2017 or 20172018) and, if you so choose, was in the top 20% of employees when ranked by compensation.<ref>[http://www.irs.gov/publications/p560/ch01.html IRS Pub 560]</ref><ref>For 2017: {{Cite web|url=https://www.irs.gov/retirementnewsroom/irs-plans/colaannounces-increases2018-forpension-dollarplan-limitations-on401k-contribution-limit-increases-benefitsto-and18500-for-contributions2018|title=COLA Increases for Dollar IRS Announces 2018 Pension Plan Limitations on Benefits and Contributions|publisher=IRS|accessdate=31 29 October 20162017}}</ref>
If HCEs contribute too much, an employer can choose among several strategies to bring its plan in compliance with the law. Here are some of the most common:<ref name="401khelp">[http://www.401khelpcenter.com/mpower/feature_030702.html Highly Compensated Employee Rules Aim to Make 401k's Equitable], 401khelpcenter.com, viewed December 25, 2014.</ref>
970
edits

Navigation menu