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ACP Test CalculatorMatching and Employee After-Tax Contributions

What does this come to under the current IRS rules?

Maximum HCE ACP under the 1.25 times and the 2 times or 2 points tests, and the pass or fail result.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Maximum HCE ACP
4.50%
Limit under the 1.25 times test
3.13%
Limit under the 2 times or 2 points test
4.50%
Drawn to one scale
Maximum HCE ACP4.50%
Limit under the 1.25 times test3.13%
Limit under the 2 times or 2 points test4.50%
All results
MeasureResult
Maximum HCE ACP4.50%
ResultFails the ACP test
Limit under the 1.25 times test3.13%
Limit under the 2 times or 2 points test4.50%
HCE ACP above (+) or below (-) the maximum, points0.30
How this was worked out
Work shownrecomputed as you type
Test 1: HCE ACP not more than NHCE ACP x 1.25
Test 2: HCE ACP not more than NHCE ACP + 2 points and not more than NHCE ACP x 2
Pass if either test is met

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Test 1: HCE ACP not more than NHCE ACP x 1.25
  • Test 2: HCE ACP not more than NHCE ACP + 2 points and not more than NHCE ACP x 2
  • Pass if either test is met

How it works

Under 26 CFR 1.401(m)-2(a)(1), a plan with matching contributions or employee after-tax contributions passes the ACP test if the HCE ACP is not more than 1.25 times the NHCE ACP, or if it exceeds the NHCE ACP by not more than 2 percentage points and is not more than twice the NHCE ACP. A plan with no eligible NHCEs is deemed to pass.

Each group's ACP is the average of the individual actual contribution ratios, matching and after-tax contributions over compensation, for its eligible employees. The prior year and current year testing methods work as they do for the ADP test.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Is the ACP test run separately from the ADP test?

Yes. Elective deferrals go through the ADP test and matching and after-tax contributions through the ACP test, each with its own correction.

What if no NHCEs are eligible?

If all eligible employees for the applicable year are HCEs, the plan is deemed to satisfy the ACP test.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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