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Appendix C Part II Schedule 7 Failure To Distribute Elective Deferrals 7 - Official Federal Forms
| Appendix C Part II Schedule 7 Failure To Distribute Elective Deferrals Form. This is a national form and can be used in Department Of Treasury . |
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APPENDIX C PART II, SCHEDULE 7 Failure to Distribute Elective Deferrals in Excess of the § 402(g) Limit Plan Name: _______________________________ EIN: ___________ Plan #: _____ (Please include the plan name, Applicant's EIN, and plan number information on each page of the submission.) SECTION I. IDENTIFICATION OF FAILURE Calendar Years (Year of Deferral) Number of Affected Participants Amount of Excess Deferrals Distributed (excluding Earnings) SECTION II. DESCRIPTION OF THE PROPOSED METHOD OF CORRECTION The plan will distribute the excess deferral to the employee(s) and report the amount as taxable in the year of deferral and in the year distributed. In accordance with Income Tax Regulations § 1.402(g)-1(e)(1)(ii), a distribution to a highly compensated employee is included in the Average Deferral Percentage (ADP) test; however, a distribution to a nonhighly compensated employee is not included in the ADP test. For any distributions attributable to elective deferrals designated as Roth Contributions, all distributions will be reported as taxable in the year distributed. Designated Roth contributions will have already been included in income in the year of deferral. The excess deferral to be distributed will also be adjusted for Earnings. Earnings will be determined from the end of the year in which the failure occurred through the year of correction. Earnings will be included in the distribution amount that is to be reported as taxable in the year of distribution. - 1 - American LegalNet, Inc. www.FormsWorkFlow.com Plan Name: _____________________________ EIN: ____________ Plan #: _______ SECTION III. CHANGE IN ADMINISTRATIVE PROCEDURES Please include an explanation of how and why the failures arose and a description of the measures that will be implemented to ensure that the same failures will not recur. SECTION IV. ENCLOSURES In addition to the applicable items listed on the Procedural Requirements Checklist for Form 8950, the Plan Sponsor encloses the following with this submission: Specific calculations for each affected employee or a representative sample of affected employees. (The sample calculations must be sufficient to demonstrate each aspect of the correction method proposed) - 2 - American LegalNet, Inc. www.FormsWorkFlow.com
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