### Question
How is the "applicable covered employee" defined?


### Answer
The term **applicable covered employee** is defined in *26 U.S.C. § 409A* as follows -

> any—



(I) covered employee of a plan sponsor,



(II) covered employee of a member of a controlled group which includes the plan sponsor, and



(III) former employee who was a covered employee at the time of termination of employment with the plan sponsor or a member of a controlled group which includes the plan sponsor

#### Citation:
  - *26 U.S.C. § 409A*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter D-Deferred Compensation, Etc. > PART I-PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC. > Subpart A-General Rule**

