Any Penalty for Non-deductible employer contribution?

[Guest Janiele]

Have a one man 401k Profit sharing Plan (cross-tested) and the participant's compensation is say $51,000. The owner did not make any 401k deferrals in 2013, and wants to make the full 415 employer contribution of $51,000 for 2013. Obviously, this $51,000 contribution is greater than the 25% deduction limit of $12,750. Other than only being able to deduct only the first $12,750, is there any IRS penalty on the non-deductible portion of the employer contribution, the $38,250. Also, is there any special IRS tax form reporting of the non-deductible employer contribution, such as a Form 5530?

[ESOP Guy]

Yes there is a 10% excise tax every year that the non-deductable contribution is in the plan. You can't take it out. So the only way to fix the problem would be to stop contribution in future years until you have deducted it all. Don't do it.

http://us-code.laws.com/title-26-internal-revenue-code/subtitle-d-miscellaneous-excise-taxes/chapter-43-qualified-pension-etc-plans/4972

You report and pay the tax on a Form 5330

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&sqi=2&ved=0CCQQFjAA&url=http%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-pdf%2Ff5330.pdf&ei=NVn0UqD1EYLQyAGr44AI&usg=AFQjCNFFmwtKBwSZLEs_AjkB-Nw7GzfYog&bvm=bv.60799247,d.aWc

Edit:

I can't think of any reason you would have a cross tested one man plan.