I have an eligible participant who made salary deferrals in 2006 and was terminated in 2006 with less than 500 hours. My question is should this person be included in the 2006 ADP test?

Same situation, but the participant did not make any deferrals in 2006. Should they be included in the 2006 ADP test.

What are the factors in determining if they should be included?

Thank you, AJM

IF they were eligible to defer they are included. Wheter they made 401(k) contributions or not is irrelevant. You're thinking of coverage rules regarding when an employee can be exlcuded (i.e., termed w/ less than 500 hours), and those rules do not apply to an ADP test.

or they may be thinking of the "otherwise excludable" rule (separately testing those who have not met the 1 YOS age 21....