Instructions For Form 5330 - Internal Revenue Service (Page 6 of 13) in pdf

b. Any transaction with contractual

a. The portion of such amount that

not apply to contributions made on

protection within the meaning of

was available for return under the

behalf of the employer or the

Regulations section 1.6011-4(b)(4).

employer’s family, or

applicable qualification rules and was

•

actually returned to the employer prior

Contributions not in excess of 6% of

to the close of the current tax year and

the compensation (as defined in section

Part II—Tax Due

404(a) and adjusted in section

b. The portion of such amount that

Required disclosure. Lines 17

404(a)(12)) paid or accrued during the

became deductible for a preceding tax

through 19.

tax year to the beneficiaries under the

year or for the current tax year.

plans.

If you are filing an amended

Form 5330 and you paid tax

Although pre-1987 nondeductible

For purposes of this exception, the

with your original return and

contributions are not subject to this

combined plan deduction limits are first

those taxes have the same due date as

excise tax, they are taken into account

applied to contributions to the defined

those previously reported, check the

to determine the extent to which

benefit plan and then to the defined

box in item H and enter the tax reported

post-1986 contributions are deductible.

contribution plan.

on your original return in the entry

See section 4972 and Pub. 560,

space for line 18. If you file Form 5330

Retirement Plans for Small Business,

Restorative payments to a defined

for a claim for refund or credit, show the

for details.

contribution plan are not considered

amount of overreported tax in

nondeductible contributions if the

parentheses on line 19. Otherwise,

Defined benefit plans exception.

payments are made to restore some or

show the amount of additional tax due

Generally, contributions up to the

all of the plan’s losses due to an action

on line 19 and include the payment with

current unfunded liability of a defined

(or a failure to act) that creates a

the amended Form 5330.

benefit plan are deductible, regardless

reasonable risk of liability for breach of

of the number of participants in the

Make your check or money order

fiduciary duty. Amounts paid in excess

plan. In addition, when determining the

payable to the “United States Treasury”

of the amount of the loss are not

amount of nondeductible contributions

for the full amount due. Attach the

considered restorative payments.

for any tax year, an employer may

payment to your return. Write your

elect, for that tax year, not to include

For these purposes, multiemployer

name, identifying number, plan number,

any contributions to a defined benefit

plans are not taken into consideration

and “Form 5330, Section ____” on your

plan except to the extent they exceed

in applying the overall limit on

payment.

deductions where there is a

the full-funding limitation (as defined in

Schedule A (Section 4972)

section 412(c)(7), determined without

combination of defined benefit and

defined contribution plans.

regard to section 412(c)(7)(A)(i)(I)).

Tax on Nondeductible

This election applies to terminated and

ongoing plans. An employer making

Employer Contributions to

Schedule B (Section

this election cannot also benefit from

Qualified Employer Plans

4973(a)(3))

the exceptions for terminating plans

Section 4972. Section 4972 imposes

and for certain contributions to defined

Tax on Excess Contributions to

an excise tax on employers who make

contribution plans under section

Section 403(b)(7)(A) Custodial

nondeductible contributions to their

4972(c)(6). When determining the

qualified plans. The excise tax is 10%

Accounts

amount of nondeductible contributions,

of the nondeductible contributions in

Section 4973(c) imposes a 6% excise

the deductible limits under section

the plan as of the end of the employer’s

tax on the excess contributions to

404(a)(7) must be applied first to

tax year.

403(b)(7)(A) custodial accounts at the

contributions to defined contribution

close of the tax year. The tax is paid by

plans and then to contributions to

A qualified plan for purposes of this

the individual account holder.

tax means any plan qualified under

defined benefit plans.

section 401(a), any annuity plan

Line 1. Enter the total current year

Defined contribution plans

qualified under section 403(a), and any

contributions, less any rollover

exception. Employer contributions to

simplified employee pension plan

contributions described in sections

one or more defined contribution plans

qualified under section 408(k) or

403(b)(8) or 408(d)(3)(A).

that are nondeductible because they

408(p). The term qualified plan does

exceed the combined plan deduction

not include certain governmental plans

Line 2. The amount you will enter on

limits of section 404(a)(7) are not

and certain plans maintained by

line 2 is the amount excludable under

subject to the 10% excise tax. In

tax-exempt organizations.

section 415(c) (limit on annual

determining the amount of

Nondeductible contributions. For

additions).

nondeductible contributions that are

purposes of section 4972,

subject to the 10% excise tax, do not

nondeductible contributions for the

To determine the amount

include:

employer’s current tax year are the sum

excludable for a specific year,

•

Employer contributions to one or

of:

see Pub. 571, Tax-Sheltered

CAUTION

more defined contribution plans which

Annuity (403(b)) Plans, for that year.

1. The excess (if any) of the

are nondeductible solely because of

employer’s contribution for the tax year

section 404(a)(7) that do not exceed

The limit on annual additions under

less the amount allowable as a

the matching contributions described in

section 415(c)(1)(A) is subject to

deduction under section 404 for that

section 401(m)(4)(A),

cost-of-living adjustments as described

year, and

•

in section 415(d). The dollar limit for a

Contributions to a SIMPLE 401(k) or

2. The total amount of the

calendar year as adjusted annually is

a SIMPLE IRA that are considered

employer’s contributions for each

published during the fourth quarter of

nondeductible because they are not

preceding tax year that was not

the prior calendar year in the Internal

made in connection with the employer’s

allowable as a deduction under section

Revenue Bulletin.

trade or business. However, this

404 for such preceding year, reduced

by the sum of

provision pertaining to SIMPLEs does

-6-

Instructions For Form 5330 - Internal Revenue Service Page 6

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