415 Safe-Harbor Compensation Clause Samples
The 415 Safe-Harbor Compensation clause defines the types of employee compensation that are considered eligible for certain retirement plan contribution and benefit calculations under IRS regulations. In practice, this clause specifies which forms of pay—such as salary, bonuses, and overtime—are included or excluded when determining limits for contributions or benefits in qualified retirement plans. By clearly outlining these parameters, the clause ensures compliance with tax laws and provides plan sponsors and participants with clarity regarding how compensation is calculated for retirement plan purposes.
415 Safe-Harbor Compensation. Compensation is defined as wages, salaries, 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 includible 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, and reimbursements or other expense allowances under a nonaccountable plan (as described in section 1.62-2(c) of the regulations)), and excluding the following:
i) employer contributions to a plan of deferred compensation which are not included in the Employee's gross income for the taxable year in which contributed, or employer contributions under a simplified employee pension plan, or any distributions from a plan of deferred compensation;
ii) amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by an Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
iii) amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and
iv) other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in Code Section 403(b) (whether or not the contributions are actually excludible from the gross income of the Employee). For any Self-employed Individual, Compensation shall mean Earned Income. For purposes of applying the limitations of this section, Compensation for a Limitation Year is the Compensation actually paid or made available in gross income during such Limitation Year. For Limitation Years beginning after December 31, 1997, for purposes of applying the limitations of this section, Compensation paid or made available during such Limitation Year shall include any elective deferral (as defined in Code Section 402(g)(3)), and any amount which is contributed or deferred by the Employer at the election of the Employee and which is not includible in the gross income of the Employee by reason of Code Section 125, 132(f)(4), or 457. DEFINED BENEFIT PLAN FRACTION means a fraction, the numerator of which is the sum of the Member's Projected Annual Benefits under ...
415 Safe-Harbor Compensation. Compensation" as defined in ---------------------------- Section 5.05(b)(ii) of this Plan.
415 Safe-Harbor Compensation. Compensation is defined as wages, salaries, 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 includible 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, and reimbursements or other expense allowances under a nonaccountable plan (as described in section 1.62-2(c) of the regulations)), and excluding the following:
415 Safe-Harbor Compensation. Wages, salaries, and fees for professional services and other amounts received for personal services actually rendered in the course of employment with the Employer maintaining the Plan (including, but not limited to commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses), and excluding the following:
(A) Employer contributions to a plan of deferred compensation which are not includible in the Participant's gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan, or any distributions from a plan of deferred compensation;
(B) ▇▇▇▇▇▇▇ realized from the exercise of a non-qualified stock option, or when property transferred to the Participant in connection with the performance of services either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
(C) ▇▇▇▇▇▇▇ realized from the sale, exchange or other disposition of stock acquired under an incentive stock option; and
(D) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity described in Code Section 403(b) (whether or not the amounts are actually excludable from the gross income of the Participant).
415 Safe-Harbor Compensation. Wages, salaries, and fees for ---------------------------- professional services and other amounts received for personal services actually rendered in the course of employment with the Employer maintaining the Plan (including, but not limited to commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses), and excluding the following:
(A) Employer contributions to a plan of deferred compensation which are not includible in the Participant's gross income for the taxable year in which contributed, or Employer contributions under a simplified employee pension plan, or any distributions from a plan of deferred compensation;
(B) Amounts realized from the exercise of a non-qualified stock option, or when property transferred to the Participant in connection with the performance of services either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
(C) Amounts realized from the sale, exchange or other disposition of stock acquired under an incentive stock option; and
(D) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity described in Code Section 403(b)
415 Safe-Harbor Compensation. Compensation" as defined in Section 5.05(b)(ii) of this Plan. (iii) Safe Harbor Alternative Definition. Compensation as defined in Section 2.09(a)(ii) above, reduced by all of the following items (even if includible in gross income): reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation, and welfare benefits.
415 Safe-Harbor Compensation. Compensation is defined as wages, salaries, 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 SEP Plan to the extent that the amounts are includible in gross
(a) Employer contributions to a plan of deferred compensation which are not includible in the Employee’s gross income for the taxable year in which contributed, or Employer Contribu- tions under a SEP plan, or any distributions from a plan of deferred compensation;
(b) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by the employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture;
(c) Amounts realized from the sale, exchange, or other disposi- tion of stock acquired under a qualified stock option; and
(d) Other amounts which received special tax benefits, such as premiums for group term life insurance (but only to the extent the premiums are not includible in the gross income of the employee). Compensation shall include only that Compensation which is actu- ally paid or made available to the Participant during the Plan Year. A Participant’s Compensation shall include any elective deferral described in Code Section 402(g)(3) or any amount that is con- tributed by the Employer at the election of the Employee and that is not includible in the gross income of the Employee under Code Sections 125, 132(f)(4), or 457. The annual Compensation of each Participant taken into account under the Plan for any year shall not exceed the Compensation limit described in Code Section 401(a)(17) as adjusted by the Secretary of the Treasury for increases in the cost-of-living in ac- cordance with Code Section 401(a)(17)(B). Such adjustments shall be made in multiples of $5,000 (the Compensation limit for 2002 is $200,000). If a Plan determines Compensation for a period of time that contains fewer than 12 calendar months, then the annual Compensation limit is an amount equal to the annual Compensation limit for the calendar year in which the Compensation period begins multiplied by a fraction, the numerator of which is the number of full months in the short Compensation period, and the denominator of which is 12.
415 Safe-Harbor Compensation. Wages, salaries, and fees for professional services and other amounts received for personal services actually rendered in the course of employment with the Employer maintaining the Plan (including, but not limited to commissions paid salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses), and excluding the following:
(A) Employer contributions to a plan of deferred compensation which are not includable in the Participant's gross income for the taxable year in