Form 5330 for owner 401k at 12/31 - prior yr or current yr?

One-person plan, employees are in a separate MEP.

Owner withholds the max 401(k) once a year on his 12/31 paycheck which is cut every year on 1/5.

The pay is included in wages for year ending 12/31.

Turns out owner forgot to deposit the 401k for 6 months.

Lost earnings was calculated and deposited

Perhaps this is a longshot but if the 401k is not going to be deposited until the next calendar year no matter what, for Form 5330 purposes can it be considered late for the next year, or more likely since it is included in taxes for prior year filing, does it have to be in that year's 5330?

If you can argue when the deposit started being late, leading to the 5330 filing requirement, that should guide which year to file for.

Let’s imagine the one-participant plan is not governed by ERISA’s title I but is described in Internal Revenue Code § 4975(e)(1)(A).

So, a prohibited transaction (if any) might be a § 4975(c)(1)(D) prohibited transaction.

The Labor department’s rule, Definition of “plan assets”—participant contributions, states that it applies “[f]or purposes of . . . section 4975 of the Internal Revenue Code[.]” 29 C.F.R. § 2510.3-102(a)(1) https://www.ecfr.gov/current/title-29/part-2510/section-2510.3-102#p-2510.3-102(a)(1). That’s logically consistent with President Carter’s 1978 Reorganization Plan.

A disqualified person might look to that rule’s interpretation to support a tax-return position.

Under that interpretation, an amount to be treated as a participant contribution need not be treated as plan assets until “the 7th business day following the day on which such amount would otherwise have been payable to the participant in cash (in the case of amounts withheld by an employer from a participant’s [self-employment income or] wages[.]” 29 C.F.R. § 2510.3-102(a)(2)(i) https://www.ecfr.gov/current/title-29/part-2510/section-2510.3-102#p-2510.3-102(a)(2)(i).

If one treats Wednesday, December 31, 2025 as both the segregation date and the payday, a participant-contribution amount might not have become plan assets until January 12, 2026.

I do not say this reasoning is correct. I suggest only that some might reason this to support a nonfrivolous tax-return position.

As always, a disqualified person should get its lawyer’s advice.

This is not advice to anyone.

The W-2 year does not automatically determine the Form 5330 year. The key for §4975 is when did the PT begin? Under the rules it begins when the withheld deferral became plan assets—i.e., when is the earliest date the amount could reasonably have been segregated from the employer’s assets. The critical factual issue is the actual payroll/pay date for the 12/31 compensation.

2510.3-102 adds that, for withheld wages, the small-plan SH is the date the amount “would otherwise have been payable to the participant in cash.”

Your facts: 

12/31/2025:  Comp is treated as 2025 compensation; reported on the 2025 W-2.
1/5/2026: check is actually cut, employer's regular annual practice.
~6 months later: deferral and lost earnings are deposited.

If the normal payroll records show that the owner’s paycheck was actually payable on 1/5, and the deduction/withholding did not occur until 1/5payroll, then there is a reasonable position that the PT began in January of the following year. Look at constructive receipt here also…. i.e., confirm, owner had no right to receive net pay before 1/5.  In that case, very good argument that the late deposit would be reported only on the following year’s 5330, even though the deferral is treated as attributable to the prior year for 401(k)/W-2 purposes. 

But, if the payroll records show pay period ends 12/31 and 12/31 is the pay date, and 1/5 merely is the date the physical check was printed or delivered, perhaps the safer conclusion is that the PT began in December (also when/if Q4 2025 Form 941 treats the wages and withholding as being paid in December).  The 1/5 merely looks administrative.  Note if it did occur in December and remained uncorrected into the next year, then there’s a §4975 transaction in both years. RR 2006-38.

Bottom line: your “next-year-only Form 5330” theory is viable if 1/5 is genuinely the payroll/payment date. If 12/31 is the actual payroll date, don’t push it.

Also, the fact that this is an owner-only plan helps some, but doesn’t drive the 5330 analysis unless the owner is self-employed rather than a W-2 employee of what I assume is a corporation. As noted by @Peter Gulia the owner only plan is generally outside Title I of ERISA because the owner is not treated as an employee for that purpose.  But that doesn’t make 4975 disappear because the regs say its plan asset rule applies for 4975 as well as ERISA.  So go back to the rule above.  The Pub 560 rule allowing owner deferrals elected by year end to be contributed by tax filing deadline, including extensions, seems potentially significant but here they’re receiving W-2 comp not self-employment income as a partner or sole proprietor so, conservatively, we advise caution trying to use this rule.