Common use of Elective Deferrals -- Excess Amounts Contributed Clause in Contracts

Elective Deferrals -- Excess Amounts Contributed. There are three different situations in which impermissible excess amounts arise under the SEP-XXX. The first way is when "excess elective deferrals" (i.e., amounts in excess of the section 402(g) limit) are made. You are responsible for calculating whether you have exceeded the section 402(g) limit in the calendar year. For 1995, the section 402(g) limit for contributions made to an elective SEP is $9,240, as indexed. The second way is when "excess SEP contributions" (i.e., amounts in excess of the deferral percentage limitation referred to above) are made by highly compensated employees. The employer is responsible for determining whether such an employee has made excess contributions. The third way is when more than half of an employer's eligible employees choose not to make elective deferrals for a plan year. In that case, any elective deferrals made by any employees for that year are considered "disallowed deferrals" as discussed above. Your employer is also responsible for determining whether deferrals must be disallowed on this basis. Excess elective deferrals are calculated on the basis of the calendar year. Excess SEP contributions and disallowed deferrals, however, are calculated on the basis of the SEP plan year, which may or may not be a calendar year.

Elective Deferrals -- Excess Amounts Contributed. There are three different situations in which impermissible excess amounts arise under the SEP-XXXIRA. The first way is when wxxx "excess elective deferrals" (i.e., amounts in excess of the section 402(g) limit) are made. You are responsible for calculating whether you have exceeded the section 402(g) limit in the calendar year. For 1995, the section 402(g) limit for contributions made to an elective SEP is $9,240, as indexed. The second way is when "excess SEP contributions" (i.e., amounts in excess of the deferral percentage limitation referred to above) are made by highly compensated employees. The employer is responsible for determining whether such an employee has made excess contributions. The third way is when more than half of an employer's eligible employees choose not to make elective deferrals for a plan year. In that case, any elective deferrals made by any employees for that year are considered "disallowed deferrals" as discussed above. Your employer is also responsible for determining whether deferrals must be disallowed on this basis. Excess elective deferrals are calculated on the basis of the calendar year. Excess SEP contributions and disallowed deferrals, however, are calculated on the basis of the SEP plan year, which may or may not be a calendar year.