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6 Cards in this Set
- Front
- Back
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Compensation must be limited by |
IRC section 401(a)(17)
The limit is $200,000, as indexed ($255,000 for 2013). |
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Salaries being averaged are limited to |
the salary limit for the year in which paid (before averaging).
*However, for years after 2001, Revenue Notice 2001-56 allows prior salaries to be limited to $200,000 rather than the actual limit in effect for the year in which the salary was paid, if the plan so provides. |
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The compensation limit is pro-rated for a short plan year. |
True |
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The compensation limit is not pro-rated if an employee is a participant in a plan for |
less than a full year. |
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For non-calendar years, the compensation limit is the limit in effect |
on the first day of the year.
This also applies to calendar year plans that use a definition of compensation over a different 12-month period from the plan year. |
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There is a separate compensation limitation from each employer |
in the case of a multiple employer plan. |
