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Characteristic Code "2K"


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Guest LWilson
Posted

I'm not believing my eyes.

I have only ever used the Characteristic Code 2K (Line 8a of 5500) if the employer provides a Match.

Someone who was unfamiliar with 5500s, and who was asked to review my work said, "But look at the instructions. 2K is also designated for a Plan in which employee contributions are allocated to separate accounts, and this plan does that . . . "

Oh my gosh . . . have I been missing something? Should I be coding any 401(k) plan which provides for individual participant accounts the 401(m) code 2K as well?!?

Posted

I believe that the 'employee contributions' referred to in the instructions are after tax contributions. After tax contributions are often referred to in this way, and like matching contributions, they are also tested under 401(m).

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