415 Compensation Clause Samples
415 Compensation. As elected by the Employer in the Adoption Agreement, Compensation shall mean all of a Participant's:
(a) Information required to be reported under sections 6041, 6051, and 6052 of the Code (Wages, tips and other compensation as reported on Form W-2). Compensation is defined as wages within the meaning of section 3401(a) and all other payments of compensation to an employee by the employer (in the course of the employer's trade or business) for which the employer is required to furnish the employee a written statement under sections 6041(d), 6051(a)(3), and 6052. Compensation must be determined without regard to any rules under section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in section 3401(a)(2)).
(b) Section 3401(a) wages. Wages as defined in section 3401(a) for the purposes of income tax withholding at the source but determined without regard to any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in section 3401(a)(2)).
(c) 415 safe-harbor compensation. Wages, salaries, differential wage payments under section 3401(h), and fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includable in gross income (including, but not limited to, commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements, and expense allowances under a nonaccountable plan (as described in section1.62-2(c)), and excluding the following:
(1) Employer Contributions (other than elective contributions described in § 402(e)(3), § 408(k)(6), § 408(p)(2)(A)(i), or § 457(b)) to a plan of deferred compensation (including a simplified employee pension described in § 408(k) or a simple retirement account described in § 408(p), and whether or not qualified) to the extent such contributions are not includible in the Employee’s gross income for the taxable year in which contributed, and any distributions (whether or not includible in gross income when distributed) from a plan of deferred compensation (whether or not qualif...
415 Compensation. The Employer in Appendix B may elect to apply the 415 definition of Compensation in Treas. Reg. §1.415-2(d)(1)
415 Compensation. All amounts paid or made available by a Plan Sponsor or 415 Affiliate to an Employee in a Limitation Year (or paid within 2½ months following such Employee’s severance from employment that relate to such Limitation Year), including:
(a) The Employee’s wages, salaries, fees for professional services, and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer to the extent that the amounts are includable in gross income (including, but not limited to, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan (as described in Treasury Regulations section 1.62-2(c));
(b) In the case of a self-employed Employee who is an employee within the meaning of Code §414(e)(5)(A)(i)(I) and the regulations thereunder, the Employee’s earned income (as described in Code §401(c)(2) and the regulations thereunder);
(c) Amounts received in connection with accident or sickness and described in Code §§104(a)(3), 105(a), and 105(h), but only to the extent that these amounts are includable in the gross income of the Employee;
(d) ▇▇▇▇▇▇▇ paid or reimbursed by the Employer for moving expenses incurred by an Employee, but only to the extent that at the time of the payment it is reasonable to believe that these amounts are not deductible by the Employee under Code §217; and
(e) Amounts described in Section 2.19(d) of the definition of Compensation (relating to Before-Tax Contributions). For the purposes of subsections (a) and (b) above, “415 Compensation” will include foreign earned income (as defined in Code §911(b)), whether or not excludable from gross income under Code §911. Compensation described in subsection (a) above is to be determined without regard to the exclusions from gross income in Code §§931 and 933 (dealing with income from sources within Guam, American Samoa, the Northern Mariana Islands, and Puerto Rico). Similar principles are to be applied with respect to income subject to Code §§931 and 933 in determining compensation described in subsection (b). The term “415 Compensation” will not include:
415 Compensation. [Note: Each of the Compensation definitions in (a), (b) and (c) includes Elective Contributions. See Plan Section 1.07(D). To exclude Elective Contributions, the Employer must elect (g).] Compensation taken into account. For the Plan Year in which an Employee first becomes a Participant, the Plan Administrator will determine the allocation of Employer contributions (excluding deferral contributions) by taking into account: (Choose one of (d) or (e))
415 Compensation. The Employer in Appendix B may elect to apply the 415 definition of Compensation in Treas. Reg. §1.415(c)‑2(a). Under this definition, Compensation means as defined in Section 1.11(B)(3) but with the addition of: (a) amounts described in Code §§104(a)(3), 105(a), or 105(h) but only to the extent that these amounts are includible in Employee's gross income; (b) amounts paid or reimbursed by the Employer for moving expenses incurred by the Employee, but only to the extent that at the time of payment it is reasonable to believe these amounts are not deductible by the Employee under Code §217; (c) the value of a nonstatutory option (an option other than a statutory option under Treas. Reg. §1.421‑1(b)) granted by the Employer to an Employee, but only to the extent that the value of the option is includible in the Employee's gross income for the Taxable Year of the grant; (d) the amount includible in the Employee's gross income upon the Employee's making of an election under Code §83(b); and (e) amounts that are includible in the Employee's gross income under Code §409A or Code §457(f)(1)(A) or because the amounts are constructively received by the Participant. [Note if the Plan's definition of Compensation is W‑2 Wages or Code §3401(a) Wages, then Compensation already includes the amounts described in clause (e).]