Instructions For Form 5330 (Page 3 of 6) in pdf

The paid preparer must complete the

Part II (Section 4972)

Specific Instructions

required preparer information and —

•

Sign the return by hand, in the space

Tax on Nondeductible Employer

Filer tax year. Enter the tax year of the

provided for the preparer’s signature

Contributions to Qualified Plans

employer, entity, or individual on whom the

(signature stamps and labels are not

tax is imposed.

Section 4972 imposes an excise tax on

acceptable).

•

Item A. Name and address of filer. Enter

employers who make nondeductible

Give a copy of the return to the filer.

the name and address of the employer,

contributions to their qualified plans. A

individual, or other entity who is liable for the

“qualified plan” for purposes of this tax

Part I

tax.

means any plan qualified under section

401(a), any annuity plan qualified under

Line 10. Tax under section 4980F. If you

Include the suite, room, or other unit

section 403(a), and any simplified employee

owe excise tax under section 4980F, write

numbers after the street number. If the Post

pension plan qualified under section 408(k)

section 4980F on line 10 and indicate the

Office does not deliver mail to the street

or 408(p). The term “qualified plan” does not

total amount of the tax owed. Attach a

address and you have a P.O. box, show the

include certain governmental plans and

schedule that contains the following

box number instead of the street address.

certain plans maintained by tax-exempt

information:

Item B. Filer’s identification number. The

organizations.

1. The number of applicable individuals

identification number of an individual (other

The nondeductible contributions are

who did not receive a section 204(h) notice;

than a sole proprietor with an employer

computed as of the end of the employer’s

identification number (EIN)) is his or her

2. The number of days in the

tax year. The current year nondeductible

social security number. The identification

noncompliance period;

contributions are equal to the amount

number of all others is their EIN.

3. A brief description of the amendment

contributed during the employer’s tax year

Item C. Name and address of plan

for which the section 204(h) notice was

over the amount of contributions allowable

sponsor. The term “plan sponsor” means:

required;

as a deduction under section 404. In

4. A brief description of the failure; and

1. The employer, for an employee

addition, prior year nondeductible

benefit plan that a single employer

5. A brief description of the correction

contributions continue to be subject to this

established or maintains;

made, if any, and if the correction is

tax annually until eliminated by either

2. The employee organization in the

complete.

distributions to the employer of the amount

case of a plan of an employee organization;

of nondeductible contributions, or a

At the top of page one of Form 5330

carryforward deduction in years after the

write in red ink “Section 4980F excise tax

3. The association, committee, joint

nondeductible contributions are made.

included”. Also, in order to prevent any

board of trustees, or other similar group of

problem with the processing of this return

Note. Although pre-1987 nondeductible

representatives of the parties who establish

(and lessen the need for correspondence

contributions are not subject to this excise

or maintain the plan, if the plan is

with the IRS), you must also enter the

tax, they are taken into account to determine

established or maintained jointly by one or

amount you are reporting on line 10 on line

the extent to which post-1986 contributions

more employers and one or more employee

36 (Part XIII).

are deductible. See section 4972 and Pub.

organizations, or by two or more employers.

560, Retirement Plans for Small Business,

No excise tax is imposed during any

Include the suite, room, or other unit

for details.

period during which any person subject to

numbers after the street number. If the Post

Part III (Section 4973(a)(3))

liability for the tax did not know that the

Office does not deliver mail to the street

failure existed and exercised reasonable

address and you have a P.O. box, show the

Tax on Excess Contributions to

box number instead of the street address.

diligence to meet the notice requirement. In

addition, no excise tax is imposed on any

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

Item D. Name of plan. Enter the formal

failure if any person subject to liability for the

name of the plan, group insurance

Accounts

tax exercised reasonable diligence to meet

arrangement, or enough information to

Line 14. Reduce total current year

the notice requirements and such person

identify the plan. This should be the same

contributions by contributions to a Roth IRA

provides the section 204(h) notice during the

name indicated on the Form 5500 series

and by any rollover contributions described

30-day period beginning on the first date

return/report filed for the plan.

in sections 402(c), 403(a)(4), 403(b)(8) or

such person knew, or exercising reasonable

Item E. Plan sponsor’s EIN. Enter the

408(d)(3).

diligence would have known, that the failure

nine-digit EIN assigned to the plan sponsor.

existed. If the person subject to liability for

Line 15. The amount excludable for your

This should be the same number used to file

the excise tax exercised reasonable

tax year is the smaller of the exclusion

the Form 5500 series return/report.

diligence to meet the notice requirement, the

allowance or the annual employer

Item F. Plan year ending. Plan year

total excise tax imposed during a taxable

contribution limitation. Figure the amount to

means the calendar or fiscal year on which

year of the employer will not exceed

enter on line 15 according to the following

the records of the plan are kept. Enter four

$500,000. Furthermore, in the case of a

steps:

digits in year-month order. This number

failure due to reasonable cause and not to

Step 1. Multiply the compensation received

assists the IRS in properly identifying the

willful neglect, the Secretary of the Treasury

during the tax year from your employer that

plan and time period for which Form 5330 is

is authorized to waive the excise tax to the

was included in gross income by 20%.

being filed. For example, a plan year ended

extent that the payment of the tax would be

Step 2. Multiply the amount in step 1 by the

March 31, 2002, should be shown as 0203.

excessive relative to the failure involved.

number of years of service as of the end of

Item G. Plan number. Enter the three-digit

See Rev. Proc. 2002-4, 2002-1 I.R.B. 127

the tax year for the tax year you are

number that the employer or plan

for procedures to follow in applying for a

computing this exclusion allowance.

administrator assigned to the plan.

waiver of part or all of the excise tax due to

Step 3. Add all of the amounts contributed

reasonable cause.

Item H. If this is an amended return, check

by your employer in previous years that

the box.

Lines 12a through 12c. If you are filing an

were not included in your gross income.

Filer’s signature. Please sign and date the

amended Form 5330 and you paid tax with

Step 4. Subtract step 3 from step 2.

form. Also enter a daytime phone number

your original return and those taxes have

where you can be reached.

Step 5. Enter the smaller of $30,000 (see

the same due date as those previously

the note below), or 25% of the

Preparer’s signature. Anyone who

reported, check the box in item H and enter

compensation you received during the tax

prepares your return and does not charge

the tax reported on your original return in the

year.

you should not sign your return. For

entry space for line 12b. If you file Form

example, a regular full-time employee or

Step 6. Enter the smaller of step 4 or step 5

5330 for a claim for refund or credit, show

your business partner who prepares the

on line 15, Part III of Form 5330.

the amount of overreported tax in

return should not sign.

parentheses on line 12c. Otherwise, show

Note. The $30,000 limitation in effect under

Generally, anyone who is paid to prepare

the amount of additional tax due on line 12c

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

a return must sign it and fill in the Paid

and include the payment with the amended

the cost-of-living as described in section

Preparer’s Use Only area.

Form 5330.

415(d). Currently, the dollar limit for a

-3-

Instructions For Form 5330 Page 3

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