Form 5330 - Excess Contributions

[emmetttrudy]

Maximum Deductible Contribution per 2009 valuation is $200,000. Employer Contributes $250,000 during the calendar year 2009. So now they must file a Form 5330 to report the excess nondeductible contributions. Are the excess contributions simply $50,000? Or can you use the value of the contributions during made during 2009 discounted back to the valuation date (1/1/2009)? If this is the case the excise tax would be slightly lower...

[emmetttrudy]

And are the taxes due by 7/31? Or as long a the form and check are postmarked by 7/31 it is considered filed timely?

[Andy the Actuary]

Assuming this is a DB plan, can part of the contributions be attributed to 2008 (and 2009 redone)? My understanding from Jim Holland (who?) was that exise tax applied each year until deducted so situation is to be considered only as last resort.

[emmetttrudy]

Assuming this is a DB plan, can part of the contributions be attributed to 2008 (and 2009 redone)? My understanding from Jim Holland (who?) was that exise tax applied each year until deducted so situation is to be considered only as last resort.

We thought of that but since they are so overfunded it would not make that much of a difference. Any portion allocated to 2008 would go right to the prefunding balance and wouldnt change the maximum for 2009 all that much. Have not completed the 2010 valuation yet but hoping 2010 will be able to eat up the excess and they'll be able to take a deduction for it in 2010.

[My 2 cents]

Not quite sure about this, but isn't it already too late to elect to put any 2008 contributions into the prefunding balance? Wouldn't that election have to have been made by the deadline to make 2008 contributions?

Is it too late to amend the 2008 Schedule SB? Is it too late to amend the 2008 corporate tax filing to deduct the contributions made in 2009 that are to be treated as applicable to 2008?

Anyway, this thread is about deduction limits. Aren't the carryover and prefunding balances ignored (i.e., always use gross assets) when calculating deduction limits (unless minimum required amount would be higher)? Treating any of the contributions as applicable to 2008 would only increase the January 1, 2009 assets and lower the amount that could be deducted with respect to 2009.