I just read an Ed Slott article and came across something I didn’t know and thought I’d check it here.

Mike works for a small employer in the year he attains age 70 1/2, where he has $1.6Million in a qualified profit sharing plan. This plan allows Mike to defer his RMD if he continues to work there and does not hold at least 5% of the company’s stock. Currently Mike holds 4% of the company’s stock in his PS plan. At age 75, Mike is still working there but that year, with his continued buying of company stock, he reaches >5% ownership in the company stock.

Question: can he continue to defer his RMD?

If I’m reading Ed’s article correctly, he can, as the 5% determination occurs only in the year one attains age 70 1/2.

Question #2: The ‘still working’ rule only requires the employee be ‘working’ for the employer on 12/31 of that year, but has no minimum on working hours or amount of salary. That is, if the employee ‘retirees’ or ‘separates from service’ on Dec. 30, then that would NOT count as a ‘still working’ year…correct?

Thanks

BruceM