What Does Covered Compensation Mean?
Covered Compensation Is Defined as the Average of the Social Security Taxable Wage Bases over a Period of 35 Year's up to and Including the Year in Which an...
Covered compensation is defined as the average of the social security taxable wage bases over a period of 35 years up to and including the year in which an employee reaches social security retirement age (SSRA). ... The law prohibits discrimination by a plan in favor of highly compensated employees.
What is the covered compensation limit for 2020?
annual compensation - $290,000 in 2021, $285,000 in 2020, $280,000 in 2019 (IRC Section 401(a)(17))
What is IRS covered compensation?
“Covered compensation” for an employee is defined by Reg. section 1.401(l)-1(c)(7) as the average of the taxable wage bases in effect for each calendar year during the 35-year period ending with the last day of the calendar year in which the employee attains social security retirement age.
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