Top-Heavy Plan Requirements

A top-heavy plan is one that mainly favors partners, sole proprietors, and other key employees. Most qualified plans, whether or not top heavy, must contain provisions that meet the top-heavy requirements.

A plan is top heavy for any plan year for which the total value of the accrued benefits or account balances of key employees is more than 60% of the total value of accrued benefits or account balances of all employees.

Top-heavy rule exception:

The top-heavy plan requirements do not apply to SIMPLE 401(k) plans or to safe harbor 401(k) plans that consist solely of safe harbor contributions.

File your personal and small business taxes (Schedule C)