Amending a W-2 for 401k

[austin3515]

LEt's say someone owns a Corporation. They pay themselves $10,000 a month, every month, and every net check is the same. They deposit $16,500 on June 30, but do not process it through payroll. So for example, the payroll taxes that should have been deposited on an extra $16,500 bonus check were never remitted. And the amount was not reported on their w-2. Obviously, the intention was to make it 401k, it's just that it never was withheld from payroll.

Has anyone seen CPA's amend the W-2 in this case? If not, what was their explanation?

[Bird]

I've seen some adjustments made that surprised me, and I think it all depends on how much control one has over the payroll process.

But I couldn't really blame anyone, CPA or payroll company, if they refused to make this kind of adjustment. At the very least, there should have been Medicare taxes withheld. so now you have other problems spiraling off. It looks like a profit sharing contribution to me.

[jpod]

Was there any kind of written deferral election in existence prior to the deposit of the $16,500 that can be interpreted to apply to that $16,500? If not, then I see no basis for treating it as an elective deferral. If there was such a written deferral election, I believe there is a basis for taking the position that the $16,500 was a good elective deferral, and a 941-X and a W-2c can be filed to correct the employment tax reporting, with appropriate deposits of soc. sec. and medicare taxes.

[austin3515]

Interesting... What about if the memo field on the check said something like "Austin Power's 401k"? Owners of small employers tend not to fill out enrollment forms for this sort of thing.

[masteff]

Did he also make the max contribution in prior years such that the pattern supports the intent?