FAQ 631: 410b--Nonresident aliens

Problem: We have a plan that has several hundred employees who are non-resident aliens and can be excluded as one of the four statutory reasons on the 410(b) test. How can we get them to populate that third line c2.(3) of the 410(b) Ratio Percentage Test report and not be excluded with Code E where they will incorrectly count against our coverage numbers in the bottom section of that same report? Please advise.

Solution: To have them show up as non-resident aliens on the 410(b) test, change the Non-resident alien field on each employee's Address screen to "Y". Also - code them a unique status code (e.g. X - but not E, U, or I) and enter that code beside "Group #2 Excluded - EU" on the Group Definition (GROUPDEF) screen in the plan specs.