402g Excess and de minimus amount

[30Rock]

Hi

If the 402g limit is exceeded by 16 cents, what is the correction? Can the $75 de minimus rule under Section 6.02(5)(b) of Reve Proc 2008-50 EPCRS be applied since it will cost more in payment fees to distribute the excess than 16 cents? Should the participant include in his 1040 as taxable income, or is there a de minimus income tax rule too?

thanks!

[Mike Preston]

Nobody will come out and say it, but there just has to be some practical reality sprinkled around at times. This is one of those times. Does it technically disqualify the plan? Yes. If you want belt and suspenders, go through the motions for the 16 cents. But if it isn't part of a continuing pattern, and you have advised the client that the technical requirement is to refund the excess, I wouldn't quibble with a decision by the plan sponsor to ignore it.

[Bird]

That gets rounded off in my records and I don't even say anything about it to the sponsor.

[PLAN MAN]

What will the IRS see on the W-2? Is the amount rounded down, so no excess is reported?