Question RE: Simple Plan

[WhiteOleander]

I am asking this question for a CPA preparer in another office. She hopes someone can help get her straight.

*****Client has 2 S-corps. He and his wife each own 50% of both companies for 100% equity. They have employees in both firms, Co A and Co B. They want to set up a SIMPLE retirement plan and health insurance plan for Company A but not Company B. Are they required under ERISA "controlled group test" to offer to employees of both companies? Company A is profitable and Company B is not profitable yet.****

Can anyone offer any help?

[Burke]

It appears this falls under the controlled group regs. See the link below:

http://www.dol.gov/ebsa/regs/ILs/il052404.html.

[WhiteOleander]

Thanks. I'll pass it on.

[Jesse]

I've been trying to learn more on S-corps so in.....

doing VERY LITTLE research I conclude they would have to offer benefits to both A & B. I tried to sort out the following links but I really start to get myself confused. If I understand correctly, by using the attribution rules as spouses would they both be considered to own 100% of each S-Corp.

http://employerbook.hypermart.net/CCRules.html#r3d6

Edit: I couldn't get the proper links to post? Not sure what I'm doing wrong, but in the meantime I see Burke posted to help you out.