Pension Plan Credit Eligible Employee
Hello-
- For the small business retirement plan startup costs credit there is a reference to not including highly comp employees. Would the spouse of the owner (making $30K) be considered a highly comp employee?
- For the credit for employer contributions it doesn’t seem clear whether the same non highly comp requirement applies (there is just a stated wage limit). Does it apply? Would the spouse of an owner making $30K be eligible for the credit?
Thank you!
Permalink Submitted by Alan - IRA critic on Mon, 2024-11-04 12:11
1) It appears so, per Sec 318 which attributes ownership status to spouses of an owner. Such ownership makes the spouse an HCE when either spouse owns more than 5% of the company. Therefore, there must be another employee who is not treated as an HCE to qualify for the credit.
2) Difficult to discern.