Schedule H - reporting corrective distributions

[Guest LoloV]

Are corrective distributions reported on Schedule H, line 2(f) for the plan year in which the distribution relates or the plan year in which the distribution was made? Example: A plan has a failed ADP test for 2002 and the distribution was made in 2003. Is the corrective distribution shown on the 2002 or 2003 Schedule H?

Thanks in advance.

[E as in ERISA]

If you are reporting on the accrual basis, then you show the distribution as an expense item on the 2002 report and balance it by showing a payable on the liabilities.

[Guest LoloV]

Is there anything we can use as a reference?

I have always reported the distributions when paid, even when accruing contributions, etc based on the following:

The Schedule H instructions read "all distributions paid during the plan year."

The fact that distributions due to ADP/ACP failures cannot be made until after the plan year of the failure also makes me feel they would not be classified as a payable for the year of the failure and reported in the year of distribution.

If the amount is reported as a payable in the year of the excess, would it be shown on Line 1(g), Benefit Claims Payable? This type of payment doesn't seem to fit within the line 1(g) instructions as the amount has not been "processed and approved for payment" by the plan year end.

I'm willing to change my method if the rational above is incorrect. Has anybody else run into this difference of opinion?