### Question
How is the term highly compensated participant defined?


### Answer
The term **highly compensated participant** is defined in *26 U.S.C. § 125* as the following:

> a participant who is—



(A) an officer,



(B) a shareholder owning more than 5 percent of the voting power or value of all classes of stock of the employer,



(C) highly compensated, or



(D) a spouse or dependent (within the meaning of section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of an individual described in subparagraph (A), (B), or (C)

#### Citation:
  - *26 U.S.C. § 125*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART III-ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME**

