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Highly Compensated Employee (HCE) Key Testing Adjustment Form By using this form, the employer reports adjustments on HCE and key employee cafeteria plan elections required to meet cafeteria plan.

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The Major 401(k) Nondiscrimination Tests They own more than 5% of the employer (either directly or by family attribution) at any time during 2023 or 2022. They received more than $135,000 in compensation from the employer during 2022.

To conduct this test, you need two percentages: Annual HCE contribution rate: Divide the average deferrals of your HCE employees by their average annual compensation. Annual NHCE contribution rate: Divide the average deferrals of your NHCE employees by their average annual compensation.

The nondiscrimination testing rules for flexible spending account plans in the Internal Revenue Code are complex. The rules test three plan components: eligibility, availability, and utilization. Eligibility: The plan's eligibility requirements must include a sufficient number of non-highly compensated employees.

To calculate this test, add the average employer contribution and after-tax contribution to the employee's deferrals. Then divide by their average annual compensation. Compare the HCE and NHCE percentages to ensure all employees are receiving fair compensation.

A key employee is defined as: An employee who earned $185,000 (indexed) or more in the prior plan year; or. Anyone who owned more than 5% of the company in the prior plan year; or. Anyone who owned more than 1% of the company and earned $150,000 or more in the prior plan year.

Under Section 125, highly compensated employees, and key employees are not entitled to receive pre-tax benefits under a cafeteria plan if the plan discriminates in favor of those individuals with respect to benefits or eligibility to participate.

The cafeteria plan nondiscrimination tests are a series of tests that are required annually by the Internal Revenue Service (IRS) to determine if a cafeteria plan unjustly favors higher-paid individuals or those in charge within an organization.

NDT should be performed by the last day of the current plan year and include all employees who were employed on any day during the plan year. It's also recommended that employers test once early or in the middle of the plan year.

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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232