What is the deadline for making a deductible employer contribution?
The contribution must be deposited into the Trust no later than the tax filing deadline for the Company’s tax return including extensions.
What is the deadline for depositing employee contribution and loan repayments?
For employers with more than 100 eligible employees, the law requires contribution to be made as soon as reasonably possible. A good general rule is to follow the same process as making federal income tax withholding. For employers with less than 100 employees, a “safe harbor” of seven business days is enforced.
I thought my prior vendor was going to file our 5500, but they did not file it. What should I do now that it is late?
The best approach is to file the form, calculate and pay the penalty, and submit a letter explaining the reason and request the regulatory agency to forgive the fine. A fine of $25/day is imposed on any late form 5500 filing.
I sponsor a 401k plan with only voluntary employee contribution. After the year was over, my administrator said I had to make contribution to all eligible employees since the plan is top-heavy. Is that true?
Unfortunately, yes. A top heavy plan is one in which the business owners’ (key employees) account balances are greater than 60% of the total. In that case, a minimum 3% contribution must be made to all non-key if the owner gets at least 3%. For this minimum, 401k contributions are counted for the key employees but not the non-key employees. Keep in mind a safe harbor 401k plan is exempt from the top-heavy rules.