FAQ 122: ADP--Coding QNEC source for ADP


We're trying to calculate a QNEC on ASC, but it looks as though it's not recognizing a source as QNEC. How would I name/set up the source?


Go into the plan specs and go to the source 4 spec screen, assuming that source 4 is not already in use. On this screen, select "QNEC" as the source description (see note below if this description is not currently available), and "Employer" as the Source Type. Set the Force Contribution field to "Yes-Use Transactions/Input by EE" and be sure to input the groups eligible for the QNEC, along with the hours requirement.

For example, if just active employees at year-end are eligible, input "34" as the groups eligible and "1000" for the hours requirement. Group 6 is terminated employees with more than 1000 hours, group 7 is terminated employees with 500-1000 hours, and group 8 is terminated employees with less than 500 hours. So, if everyone was eligible for a QNEC, the groups eligible would be "34678" with "1" as the hours requirement.

After setting up a QNEC source and saving the specs, when you redo the ADP test, the QNEC source should the show up on the Corrections Setup screen. If you are planning to do a QMAC as well, you may want to code source 5 for the QMAC, using the same coding that you did for source 4.

To add a global source description for the QNEC if one does not already exist, do the following. Go to Access-Global Specifications. When the GLOBALS application opens, choose the "Source Names" option (or choose View-Source if not using the Tree View). Then choose Edit-Add to add a new source description. It will automatically assign a description number. Input the short name as "QNEC" and the long name as "Qualified Nonelective" or something similar and click "OK" to save the change. Then click on the "Cancel" button to exit out of the Add Source Names dialog box, and "OK" or "Cancel" to exit out of the Source Names screen. Then go back into your plan's specs and assign the new global description to source 4 or above so that it can be used when you run the ADP test.