401 kamounts

[Guest Dan Shea]

Alright I am ready to get blasted but here goes:

Client came to us with case of errors on employee's W-2 for simplicity sake rounded numbers box 1 shows 182,500.00 box 3 shows Fica limit number box 5 shows 200,000.00 box 12 shows d and 22,000.00 so taxpayer did not get credit (on taxes), for full contribution including catchup. The payroll company (national I might add), did not catch error CPA prparing taxes did not catch error nor did IRS so far. So participant said since I paid tax on money can it be treated as a Roth 401 k for amount missed (with tax benefit)! Open to opions pro or con

[PensionPro]

What is the error on the W-2? Are the pre-tax deferrals included in the box 1 number?

Edit: I think you are saying the catch-up contributions are included in box 1, right? The numbers do not add up because you are using 2013 deferrals of 17500 plus 182500 to get to 200000 gross, which means 4,500 catch up. I get the point though.

[PensionPro]

Based on 2.05(3) of Revenue Procedure 2003-12 it would be an option to treat the catchup contributions as Roth contributions. The W-2 may need to be amended to show the Roth contributions with the proper code (AA for 401k plan).

[Guest Dan Shea]

What is the error on the W-2? Are the pre-tax deferrals included in the box 1 number?

Edit: I think you are saying the catch-up contributions are included in box 1, right? The numbers do not add up because you are using 2013 deferrals of 17500 plus 182500 to get to 200000 gross, which means 4,500 catch up. I get the point though.

yes box 1 did NOT show catch up but box 12 showed total including catch up we got copies of w-2's and saw it right away been going on for a couple of years and no one else has questioned it