Lost Earnings - Reflecting on Form 5500

[401(k)athryn]

This should be easy...

An employer has late deferral deposits in 2016 and deposits the lost earnings on all late 2016 deposits in 2017.  I am reporting the total of late deferrals on the 2016 & 2017 Form 5500-SF on line 10a.

Question -  Do you show the "lost earnings" deposit in 2017 as earnings on the Form 5500-SF OR do you show it as an employer contribution?  I have always shown as an employer contribution because it is a deductible contribution; however, I have reason to question this method.  What do you do?

Thanks!

[Karoline Curran]

We show it as earnings on the 5500SF since it was deposited as earnings.

[Bird]

In plans with recordkeepers, this will typically get added to earnings and that's how we show it.  For plans without recordkeepers...well, same answer.

Good point about it being deductible but from an accounting standpoint I think it might be carved out as an administrative expense.

 

[401(k)athryn]

Thank you Karoline & Bird.  Anyone do it the other way?  It probably doesn't matter much, but might be time to change my ways...

[Karoline Curran]

1 hour ago, 401(k)athryn said:

Thank you Karoline & Bird.  Anyone do it the other way?  It probably doesn't matter much, but might be time to change my ways...

You're welcome! I

[msmith]

We also record as earnings.