Final answer:
The incorrect statement about age-based profit-sharing plans is that they favor younger employees; these plans actually favor older employees due to their shorter accumulation period for retirement savings. The mentioned maximum annual additions and compensation limits are correct, as is the adjustment of participant compensation using a discount factor.
Step-by-step explanation:
The correct statement for 2022 regarding age-based profit-sharing plans is the one concerning the plan's favoritism towards younger employees. Age-based profit sharing plans are actually designed to favour older employees because they have fewer years to save for retirement, so contributions for them are higher to compensate for the shorter accumulation period. The maximum annual additions limit is indeed $61,000, and the maximum annual compensation considered for determining contributions is $305,000.
These figures are updated periodically to account for inflation and other economic factors. The compensation of participants is adjusted using a discount factor based on the participant's age and the interest rate chosen by the plan sponsor, to take into account the time value of money and the principle of compound interest.