Which year gets the deferrals when a payroll period is split between y

[John A]

An employer with a 2-week payroll period had a payroll begin December 27, 1999 and end January 7, 2000. Do the deferrals associated with that payroll get attributed to 1999, 2000, or split between the years for 402(g) and ADP test purposes? Does the employer get to choose? If the employer can choose, can the decision be changed each year?

[Guest]

the joys of 401(k)s and payroll periods.

In your example normally the deferrals would be counted in 2000. However, see 1.415-2(d)(5)(ii) which permits comp paid in the first few weeks of the new year to be treated as comp for the prior year. This would refer to terminees. e.g. ee quits 12/29/99. since he didn't work in 2000, you don't have to count him in 2000 - basically since he couldn't have deferred for the plan beginning 1/1/2000

also 1.401(k)-1(B)(4)(i)(B)(1) elective deferrals relate to a plan year if they represent comp for services for that plan year. (I think I copied the reference correctly!)

I would think you would want to be consistent.

for 402(g), since your deferral amount appears on your w-2, I think you are stuck. for adp test I think you have the ability to include in the prior year

[Guest PLHart]

It is not the pay period that is the key it is the pay date. The entire comp for the pay period is paid on a specific pay date, either in 1999 or 2000. The comp and deferral will be reflected on the W-2 for the year in which it is actually paid and that will also be the plan year to which the comp and deferral amounts are attributed.

[Guest Elinor Merl]

I agree that the "pay date" determines the year to which the contribution will be attributable; and that would coincide with the year to which it relates under the 402(g) limit.

[Earl]

I agree that it would be year 2000 comp and deferral. I always viewed the 1.415-2(d)(5)(ii)"transfer" technique as permission to diviate from the W-2s for ADP testing. Not for 402(g). I always thought of this as one of many ways you can deviate from reality in ADP testing. (shifting, otherwise excludible, current/prior, gross up or not, refunds no longer result in test passage)