The IRS Term for Highly Compensated Employees

Identifying highly compensated employees in an initial or short plan ...

An employee is an HCE if he or she is an employee during the initial plan year and his or her compensation during the 12-month period ...

Highly Compensated Employee (HCE) Definition and ... - Investopedia

Owned more than 5% of the business at any time during the year or the preceding year, regardless of the amount of compensation received. · Received more than ...

Highly Compensated Employee | Retirement Glossary Term

Who is a highly-compensated employee (HCE)? · Ownership test: An employee is considered to be an HCE if he or she owns more than 5% of the company sponsoring the ...

Retirement plans definitions | Internal Revenue Service

ADP or actual deferral percentage is an annual test in a 401(k) plan that compares the average salary deferrals of highly compensated employees ...

401(k) Plan Rules for Highly Compensated Employees - SmartAsset

The annual limit on compensation that can be taken into account for contributions and deductions increased to $345,000 in 2024 (up from $330,000 ...

401(k)ology – Highly Compensated Employees - Newfront

One of the key definitions in the Internal Revenue Code is found in IRC Section 414(q) – Highly Compensated Employees. The statutory definition ...

How to overcome being designated a highly compensated employee

Who is a highly compensated employee? · Officers making over $225,000 for 2023 (up from $215,000 for 2023) · Owners holding more than 5% of the stock or capital ...

What Is a Highly Compensated Employee? | Definition

A highly compensated employee either owns more than 5% of the interest in a business at any time during the year or the preceding year or ...

Who Are Highly Compensated and Key Employees? | DWC

An HCE is any employee who meets either an ownership test or a compensation test at any time during the plan year in question or in the immediately preceding ...

Key Employee: The IRS Term for Highly Compensated Employees

A key employee is a staffer who is a stakeholder with a decision-making role at a company.

Contents of Form 8871: Meaning of "highly compensated employees"

Information must be supplied on Form 8871 for highly compensated employees. For this purpose, highly compensated employees are the five ...

Compensation Definition in Safe Harbor 401(k) Plans - IRS

The definition will satisfy IRC Section 414(s) if it (i) does not by design favor highly compensated employees, (ii) is reasonable within the ...

Highly Compensated Employee - Corporate Finance Institute

Highly compensated employees refer to the employees who own more than 5% of the interest in a business or receive compensation above a certain amount.

Who is considered a highly compensated employee (HCE)?

The compensation test: Earned more than the HCE compensation limit in the prior year ($135,000 for 2022; $150,000 for 2023), OR · The ownership test: Owned more ...

2024 Limitations Adjusted as Provided in Section 415(d), etc - IRS

The limitation used in the definition of “highly compensated employee” under section 414(q)(1)(B) is increased from $150,000 to $155,000 ...

Understanding 401(k) Requirements for Highly Compensated ...

The IRS guidelines define a highly compensated employee as an individual who passes either an ownership test or a compensation test: Ownership test: Assesses if ...

Highly Compensated Employees: 4 Rules for Employers - Eddy

Highly compensated employee (HCE) is a classification that the Internal Revenue Service (IRS) uses to monitor company compliance around 401(k) contributions.

Non-Highly Compensated Employee (NHCE) - Westlaw

An employee who is not a highly compensated employee. Plans examine previous year's salary to determine whether an employee fits into one of these two mutually ...

401(k) plan qualification requirements | Internal Revenue Service

Is available to all such participants or beneficiaries on a reasonably equivalent basis, · Is not made available to highly compensated employees ...

IRS Indexed Limits for 2025 - The Standard

Compensation Limit5. 401(a)(17); 404(l). $345,000. $350,000. Highly Compensated Employee Income Limit6. 414(q)(1)(B). $155,000. $160,000. Key Employee Officer.