Eligible Deferral Wages (Posted November 22, 2002) Technical Tip 85: The following question and answer were from the IRS Q&A Session at the 2001 ASPPA Annual Conference: Participant terms 12/31/00. Has final paycheck due to vacation reconciliation that will be paid in 2001. He was a 4% contributor and the ADP average for NHCE’s was 5% for 2000. Is this final paycheck and deferral used in the 2001 testing even though he wasn’t actually working in 2001? Response: He is not an employee performing services in 2001. Therefore, this does not count as eligible deferral wages in 2001. View all Tips © 2012 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.