W-2 issued with no pre-tax deferrals

[katdmin]

Hello, 

I am working on a new plan for 2020 that has 4 employees, husband and wife and 2 NHCEs.  I received the census and there were no deferrals in Box 12 and Boxes 1, 3 and 5 are the same (telling me that no deferrals were deducted).  Roth is not permitted in the plan. 

When I received the brokerage statements, I noticed a large deposits and when I questioned the employer, he said that was $19,500 for both he and his wife. 

I am going to call the CPA and discuss with him.  I think I remember something about that even if it's not on the W-2, they can report it on their 1040 and still deduct it?  I want to make sure before I tell the CPA that they have to file corrected W-2s. 

 

Thanks!   

[Lou S.]

If the husband and wife are W-2 employees then the 401(k) contributions need to be run through payroll and be reflected on the W-2s. If they are self-employed partners they would deduct their own 401(k) contribution on the 1040.

[katdmin]

Thanks Lou.  I had another one a few weeks ago and I mentioned that there weren't any deferrals and he went back to the CPA and had it corrected.  I just didn't want to sound dumb if there was another way or something I wasn't aware of!