ATMs

[DTH]

I have a plan that failed ADP testing and corrections will be distributed after the 2-1/2 month cut-off. Some of the ADP excess contribuions had attributable to matching (ATMs) dollars that need to be forfeited.

Are the ATMs also subject to the 10% excise tax imposed on the plan sponsor? I think not since they are not distributed and will be used by the plan to offset future contributions or reduce fees. If they are subject to the excise tax, could you provide me with a Code cite.

Thanks!

[Tom Poje]

1.401(m)-2(b)(4)(i)

10% excise tax on excess aggregate contribution

it does not say

10% on 'match related to excess contribution'

so no tax

[Guest psgross]

If you look at the instructions for Form 5330, it indicates that the tax is on the excess contributions AND the excess aggregate contributions made to or on behalf of the highly compensated employees (Part XII - Section 4979) of form.

[Guest Midas]

psgross - Are you implying tax is due? Associated match (orphan match, attributable match) is not the same as excess aggregate.

No tax is required on associated match.

[Guest psgross]

Sorry....misread the "match attach".....you are correct........no tax due on match attached.............