Guidance on contributions of payments employees would receive for unused vacation or similar payments on termination of employment.
Document Excerpt
(1) Do the amendments described below to an existing qualified profit sharing plan requiring or permitting certain contributions to the plan of the dollar equivalent of unused paid time off at a participant’s termination of employment cause the plan to fail to meet the requirements of § 401(a) and, if applicable, § 401(k) of the Internal Revenue Code (Code)?
(2) When is a participant required to recognize gross income with respect to the contributions to the qualified profit-sharing plan and payments to the participant as described below?
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