{"id":6359,"date":"2011-10-21T04:58:53","date_gmt":"2011-10-21T08:58:53","guid":{"rendered":"https:\/\/old.visionpayroll.com\/kb\/?p=6359"},"modified":"2011-10-21T17:35:12","modified_gmt":"2011-10-21T21:35:12","slug":"question-of-the-week-what-are-the-2012-highly-compensated-employee-limits","status":"publish","type":"post","link":"https:\/\/old.visionpayroll.com\/kb\/2011\/10\/question-of-the-week-what-are-the-2012-highly-compensated-employee-limits\/","title":{"rendered":"Question of the Week: What Are the 2012 Highly Compensated Employee Limits?"},"content":{"rendered":"
\r\n\t\"What<\/a>\r\n\t
What Are the 2012 Highly Compensated Employee Limits?<\/div>\r\n<\/div>This week\u2019s question comes from Carla, a company president.<\/p>\n

Carla asks:<\/em><\/p>\n

We\u2019re doing some compensation planning for next year. What are the 2012 Highly Compensated Employee Limits?<\/p>\n

Answer<\/strong>: The IRS has just released updated information for 2012.<\/p>\n

IRS Releases 2012 Highly Compensated Employee Limits in IR-2011-103<\/strong><\/p>\n

In IR-2011-103<\/a>, the Internal Revenue Service (IRS)<\/span><\/a> announced that for 2012 the Highly Compensated Employee Limitation under \u00a7414(q)(1)(B)<\/a> of the Internal Revenue Code of 1986 will increase to $115,000. Non-discrimination testing in some types of retirement plans limits the deferral rate of \u201chighly compensated employees\u201d (HCEs) based upon the deferral rate (ADP) of the \u201cnon-highly compensated employees\u201d.<\/p>\n

Highly Compensated Employee Compensation Limit Had Been $110,000<\/strong><\/p>\n

For 2012 plan year testing, an HCE is anyone who was a \u201c5-percent owner\u201d at any time during 2011 or 2012 or anyone who received in excess of $110,000 in compensation during 2011 and, if elected by the employer, is in the top twenty percent of employees based upon compensation. The HCE limit was also $110,000 for 2010 and 2011 plan year testing. The new $115,000 limit for 2012 is to be used for 2013 plan year testing.<\/p>\n

Look-back Provision Impacts HCE Testing Period<\/strong><\/p>\n

Since the law includes a look-back provision, employees who earned more than $110,000 in 2010 are generally considered HCEs for 2011 plan year testing, employees who will earn more than $110,000 in 2011 are generally considered HCEs for 2012 plan year testing, and employees who will earn more than $115,000 in 2012 are generally considered HCEs for 2013 plan year testing.<\/p>\n

Contact Vision Payroll for More Information on HCEs<\/strong><\/p>\n

Contact Vision Payroll<\/a> if you have questions on changes to the HCE definition for 2012 to be used in 2012 plan year testing or get further information at Important Facts and Figures<\/span><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

What Are the 2012 Highly Compensated Employee Limits? This week\u2019s question comes from Carla, a company president. Carla asks: We\u2019re doing some compensation planning for next year. What are the 2012 Highly Compensated Employee Limits? Answer: The IRS has just released updated information for 2012. IRS Releases 2012 Highly Compensated Employee Limits in IR-2011-103 In […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[1674,435,1064,1199,1200,433,438,436,428,321,1675,437,432,44],"_links":{"self":[{"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/posts\/6359"}],"collection":[{"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/comments?post=6359"}],"version-history":[{"count":6,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/posts\/6359\/revisions"}],"predecessor-version":[{"id":6371,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/posts\/6359\/revisions\/6371"}],"wp:attachment":[{"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/media?parent=6359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/categories?post=6359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/old.visionpayroll.com\/kb\/wp-json\/wp\/v2\/tags?post=6359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}