402g test

[Guest Achilles]

When running a 402g test, are you testing contributions with payroll dates for the testing year?

For example, I have a 2003 deferral (12/23/03 payroll date) that wasn't processed until March 2004. Should this deferral be included in my 2003 402g test?

Thanks.

[Archimage]

I am assuming that "processed" means they didn't actually send the deferrals to the trust until 3/04. These would be included in the 402(g) limit since they are included on their W-2s.

The employer will also have to make up lost earnings for late deferrals, file Form 5330 with excise tax, etc.

[Tom Poje]

and remember, the govt is going to look at the person's w-2.

if it is more than the 402(g) limit they will tax, whether you distribute the $ or not.

you only have a few days left to fix that.

and if you don't, then when the person takes an actual distribution, he will be taxed again.