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Minimum Coverage TestAmong many other Internal Revenue code requirements, a tax- qualified retirement plan must cover a minimum percentage - generally 70 percent - of all of the practice's employees. This minimum coverage test calculates the percentage of employees who are covered by a retirement plan by counting all employees (including leased employees) of the practice, as well as the employees of companies controlled by, or affiliated with, the practice. In general, another company is controlled by the practice if it is 80 percent or more owned by the practice, or 80 percent or more owned by the owners of the practice.
Revised July 18, 2005
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Information is provided for review and consideration only. Please consult legal and tax advisors for practical advice pertaining to your business and personal situations. This page was last updated on Wednesday, January 02, 2008 11:23 AM |
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