Question

Would the following employees be considered a Highly Compensated Employee for 2018 (Yes or No)?

5. Amy, a 2% owner whose salary last year was $165,000. _____

6. Red, a 6% owner whose salary was $23,500 for the last five years. _____

7. Reese, an officer who earned $115,000 last year and is the sixth highest paid employee out of 96 employees. _____

8. Hank, a 0.5% owner who earned $127,000 last year and is in the top 20% of paid employees. ___

Answer 1

They criteria required be considered a Highly Compensated Employee for 2018 are (any one of the criteria should be satisfied): (1)) Salary >$120,000
2)) owns > 5% company
3)) Top 20% of paid employees

5. Amy, a 2% owner whose salary last year was $165,000.: YES (Salary >$120,000)

6. Red, a 6% owner whose salary was $23,500 for the last five years. YES (owns > 5% company)

7. Reese, an officer who earned $115,000 last year and is the sixth highest paid employee out of 96 employees. YES (Top 20% of paid employees)

8. Hank, a 0.5% owner who earned $127,000 last year and is in the top 20% of paid employees. YES (Top 20% of paid employees)

Please do rate me and mention doubts, if any, in the comments section.