Item 7g

[Guest Giovanni]

I'm preparing a 5500 on a CASH basis for a profit sharing plan. The contribution for the plan year was deposited after the end of the year. The end-of-year assets on the Sched I does not reflect this contribution. I have several new employees who had no money in their accounts as of the end of the plan year since the contribution was deposited after year-end. Am I right to NOT count them in Item 7g as "participants with account balances"?

[JohnCheek]

The instructuctions, for a 401(k) plan, say to include anyone who made a contribution to the plan for this or a prior year. Consider each person's account balance to include their contributions, earnings thereon, minus forfeits -- your plan language probably says that. So a participant can have an account balance, even if the contribution was not yet transmitted to the plan.

Probably more important, item 1 of question 7 would definitely include these people in the total participant count.

[Guest Giovanni]

Thanks for your reply. The situation I have is a Profit Sharing plan, not a 401(k) plan. Would your answer be the same for a Profit Sharing plan?