5330 - 402g Limit

[CJS07]

Would a 5330 need to be filed if a participant went over the 402g limit in 2007 and the refund was not processed until July of 2008?

[Lou S.]

A Form 5330 is not required.

The participant however will have taxable income in two years, the year of the deferral and the year of the distribution. 1.401(g)-1(e)(8)(iii).

Also I'm not sure if they changed the rules on this with the final 401(k) but I think late refunds of excess deferrals are problematic now and may require EPCRS action. Maybe someone else can weigh in this part.