ADP testing using W-2

[Guest Hartnett123]

Can one use the 401(k) deferral data from W-2 forms to do ADP testing?

[Blinky the 3-eyed Fish]

I am a bit confused by the question. The W-2 summarizes in total the deferrals made during the year by the participants. Why would you think you couldn't use it?

[WDIK]

The W-2 summarizes in total the deferrals made during the year by the participants.

Now if I could only convince several small employers (and their accountants) who prepare Forms W-2 and transmit deferrals themselves that this is the case....

[Guest Hartnett123]

The W-2 is cash based. So, you have a little overlap here.

For 2003 for instance, the deferrals from 2002 will be included as part of your 2003 401(k) amount, and any deferrals made at the end of 2003 will not be included.

Am I just over analyzing this?

[K-t-F]

The way I see it the W2 shows what you were paid and what you chose to defer during the year... Whether the deferral was not actually paid (deposited to the plan) till the biginning of 2004 is moot. The deduction was a 2003 deduction.

[Guest Hartnett123]

No, I'm not referring to when the money is deposited, I'm referring to how things are reported on the W-2. They are reported on a cash basis. This means a deferral you made at the end of 2003 will actually be reported on the 2004 W-2.

[Harwood]

Deferrals are always based on payday, not "pay-period ending" or "time-report ending." [Counting hours is a different discussion].

I am unclear how "a deferral you made at the end of 2003 will actually be reported on the 2004 W-2"

[Guest Hartnett123]

I see. I think that's where I was confused. Thank you. I thought deferrals were based on "pay period ending . . ."