Owner Only Late Deposits

Hopefully a simple question for a Friday.  Owner-only plan.  Accountant was taking 401(k) deductions from payroll for the owner.  Owner was not depositing the deferrals.  Question...do the late deposit rules apply to an owner-only plan?  We can certainly work up some lost earnings and prepare a 5330, but is it required in this instance?

Thanks very much.

Actual W-2 wage or a draw from an unincorporated entity?  The prohibited transaction rules still apply but the deferral deposit timing might adjust if this is someone for whom all the income is actually realized only at year-end.

W2 wages from SCorp.  Thank you for confirming a correction is required on the W2 comp deferrals.

I’m not so sure. Even if it’s w-2 wages, an owner only plan isn’t subject to Title 1 of ERISA and that’s what drives the DOL. 

Yeah, but he's still holding "plan money" later than he should, regardless of whether there's DOL oversight, though.  Otherwise why bother to fund your deferrals at all, just take the tax deduction 😀

39 minutes ago, Bri said:

Yeah, but he's still holding "plan money" later than he should, regardless of whether there's DOL oversight, though.  Otherwise why bother to fund your deferrals at all, just take the tax deduction 😀

I would still recommend meeting the tax deduction rules for the IRS.