Exclusion of Employee and 5500 Reporting

[Guest TPAStacey]

If an employer excludes employees from participating, realizes it, self corrects by depositng the corrective deferrals and match, do they have to report this as a late contribution on the Form 5500 on line 4a?

I wouldn't think so because the employer did not "receive" participant contributions that it failed to deposit (as stated in the instructions).

thanks!

[ETA Consulting LLC]

No. Apples and Oranges. The late deposit rule is a prohibited transaction issue designed to preclude the employer from making personal use of amounts that were withheld from employees' pay. In your case, nothing was actually withheld.

Good Luck!