FAQ 137: ADP--Showing $16,000 of deferrals for HCE


I am running an ADP test, and want to use a QNEC as the correction method. One of the HCEs is deferring $16,000. The test is taking this entire amount into consideration when calculating the QNEC percentage. What am I doing wrong?


To correctly calculate catchup, run the 402(g) test prior to running the ADP test. Read the catchup documentation on our website for the correct steps to follow in testing plans that have catchup contributions in them.