Tax credit for start up plan

[Guest R. Daestrom]

If an employer starts a 2002 401(k) plan and plans on taking advantage of the tax credit that is available for admin costs, can the employer also take a tax deduction for these same fees on the company tax return? This sounds fishy to me, but I wasn't sure how the company tax side of things work. Even before the tax credit, could companies take a deduction for plan expenses paid by the company?

[Guest R. Daestrom]

I think I just found my answer in ERISA Outline Book, page 7.444.

"The employer may not deduct any qualifed start up operating expenses for which the credit is claimed."

That seems to cover it.