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402g test


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2 replies to this topic

#1 Achilles

Achilles

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Posted 07 April 2004 - 10:22 AM

When running a 402g test, are you testing contributions with payroll dates for the testing year?
For example, I have a 2003 deferral (12/23/03 payroll date) that wasn't processed until March 2004. Should this deferral be included in my 2003 402g test?

Thanks.

#2 Archimage

Archimage

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Posted 07 April 2004 - 10:42 AM

I am assuming that "processed" means they didn't actually send the deferrals to the trust until 3/04. These would be included in the 402(g) limit since they are included on their W-2s.

The employer will also have to make up lost earnings for late deferrals, file Form 5330 with excise tax, etc.

#3 Tom Poje

Tom Poje

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Posted 07 April 2004 - 10:56 AM

and remember, the govt is going to look at the person's w-2.
if it is more than the 402(g) limit they will tax, whether you distribute the $ or not.
you only have a few days left to fix that.
and if you don't, then when the person takes an actual distribution, he will be taxed again.