Form 5500 reporting of 2015 Contribution made in November 2016 for calendar year plan

[AdKu]

Due to error in payroll reporting, 10 employees were not allocated employer contribution for the initial plan year, i.e., a calendar year plan established in 2015.

These employees are going to receiving non-elective employer contribution now, i.e., in November 2016.

How do we report this contribution on Form 5500?

Should it be reported on the 2015 Form 5500 or on the 2016 Form 5500.

From my reading, it appears that these contribution will be part of the 2016 limit, i.e., for the purposes of 415 as well as 404.

Does this limitation apply to deferrals, too?

4 plan participants deferral contribution deducted from their respective 2015 earnings were not deposited to the plan until this time . Unfortunately, from one of the participants, an HCE, $18,000 was deducted from his 2015 earning as deferral contribution but only $16,500 was deposited during 2015. The plan is correcting the error by depositing the $1,500 including the lost earnings now (October 17, 2016). Does this $1,500 count against his 2016 402(g) limit?

[401king]

Assuming that your 5500 is accrual based, just amend the 2015 Form 5500. If you report the 5500 on cash basis then it's lumped in with 2016 ER contributions.

Why would the $1500 count against 2016? It was withheld in 2015; just not deposited until the following year - same as any 12/31/2015 payroll withholdings.

And report the late contributions & VFCP, lost earnings, etc.

[Tom Poje]

even under EPCRS, if a correction was made for a missed contribution, there is no mention of a need of going back and amending a prior year 5500, nor have I ever seen any comments made by the IRS that you had to do this (even as a clarification note)

of course that doesn't mean they just assume that everyone does indeed amend a prior 5500, but I suspect they would find that it isn't done!

the issue of 415 shouldn't apply to missed contribution. for example. Fred missed receiving a top heavy in 2015.

he quit early Jan 2016. if 415 applied based on 'when' the contribution was made for a missed contribution, he wouldn't be able to receive it because of a 415 violation in 2016. that makes no sense.

[Kevin C]

A corrective allocation for 2015 counts towards the 2015 Section 415 limit, regardless of when it is deposited. The following provision has been part of EPCRS for several revisions:

Rev.Proc. 2016-51 Section 6.02 02(4)(b) A corrective allocation to a participant's account because of a failure to make a required allocation in a prior limitation year is not considered an annual addition with respect to the participant for the limitation year in which the correction is made, but is considered an annual addition for the limitation year to which the corrective allocation relates. However, the normal rules of § 404, regarding deductions, apply.