Tax Facts

3855 / How do 401(k) plans satisfy the IRC nondiscrimination requirements?

These plans may not use the general test of IRC Section 401(a)(4). The plans must satisfy the IRC’s nondiscrimination requirements following the requirements that are specified under IRC Sections 401(k) and 401(m). Those sections also allow several safe harbor designs that can eliminate a requirement to complete a mathematical test for deferrals and matching contributions ( Q 3802 to Q 3808).1

1.  IRC §§ 401(k), 401(m); Treas. Reg. § 1.401(a)(4)-1(b)(2)(ii)(B).

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