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

nondiscrimination requirements of section

Line 40. Include on line 40 the net amount

Part XI (Section 4977)

401(k)(3).

of the liquidity shortfall (subtract line 39 from

line 38).

The “excess aggregate contributions”

Tax on Excess Fringe Benefits

subject to the section 4979 excise tax are

Line 32. If you made an election to be

equal to the amount by which the aggregate

Privacy Act and Paperwork Reduction

taxed under section 4977 to continue your

matching contributions of the employer and

Act Notice. We ask for the information on

nontaxable fringe benefit policy that was in

the employee contributions (and any

this form to carry out the Internal Revenue

existence on or after January 1, 1984, check

qualified nonelective contribution or elective

laws of the United States. This form is

the “Yes” box on line 32a and complete lines

contribution taken into account in computing

required to be filed under sections 4971,

32b through 32d.

the contribution percentage under section

4972, 4973, 4975, 4976, 4977, 4978,

Line 32c. The excess fringe benefits are

401(m)) actually made on behalf of the

4978A, 4978B, 4979, 4979A, 4980, and

figured by subtracting 1% of the aggregate

highly compensated employees for each

4980F of the Internal Revenue Code.

compensation paid by you to your

plan year exceed the maximum amount of

Section 6109 requires you to provide your

employees during the calendar year that

the contributions permitted in the

taxpayer identification number (SSN or EIN).

was includable in their gross income from

contribution percentage computation under

If you fail to provide this information in a

the aggregate value of the nontaxable fringe

section 401(m)(2)(A).

timely manner, you may be liable for

benefits under sections 132(a)(1) and

However, there is no excise tax liability if

penalties and interest. Routine uses of this

132(a)(2).

the excess contributions or the excess

information include giving it to the

aggregate contributions and any income

Department of Justice for civil and criminal

Part XII (Section 4979)

earned on the contributions are distributed

litigation, and cities, states, and the District

(or, if forfeitable, forfeited) to the participants

of Columbia for use in administering their

Tax on Excess Contributions to

for whom the excess contributions were

tax laws. We may also disclose this

Plans With a Cash or Deferred

made within 2

months after the end of the

information to Federal, state, or local

Arrangement

plan year.

agencies that investigate or respond to acts

or threats of terrorism or participate in

Section 4979. Any employer who maintains

Part XIII (Section 4980)

intelligence or counterintelligence activities

a plan described in section 401(a), 403(a),

concerning terrorism.

403(b), 408(k), or 501(c)(18) may be subject

Tax on Reversion of Qualified Plan

You are not required to provide the

to an excise tax on the excess aggregate

Assets to an Employer

information requested on a form that is

contributions made on behalf of highly

subject to the Paperwork Reduction Act

compensated employees. The employer

Section 4980. Include on lines 36 and 10

unless the form displays a valid OMB control

may also be subject to an excise tax on the

the section 4980 tax on employer reversions

number. Books or records relating to a form

excess contributions to a cash or deferred

from a qualified plan. The reversion excise

or its instructions must be retained as long

arrangement connected with the plan.

tax is either 50% or 20%. The excise tax

as their contents may become material in

rate is 50% if the employer (1) does not

The tax is on the excess contributions

the administration of any Internal Revenue

establish or maintain a qualified

and the excess aggregate contributions

law. Generally, tax returns and return

replacement plan following the plan

made to or on behalf of the highly

information are confidential, as required by

termination or (2) provide certain pro-rata

compensated employees (as defined in

Code section 6103.

benefit increases in connection with the plan

section 414(q)).

termination. See section 4980(d)(1)(A) or

The time needed to complete and file this

A highly compensated employee

(B) for more information.

form will vary depending on individual

generally is an employee who:

circumstances. The estimated average time

If you owe the section 4980 tax, enter the

1. Was a 5-percent owner at any time

is:

date of the reversion on line 34 and the

during the year or the preceding year, or,

reversion amount and applicable excise tax

2. For the preceding year had

Recordkeeping . . .

18 hr., 39 min.

rate on line 35. If you use a tax percentage

compensation from the employer in excess

other than 50%, explain on line 37 why you

Learning about the

of a dollar amount for the year ($85,000 for

qualify to use a rate other than 50%.

law or the form . . .

8 hr., 56 min.

2001) and, if the employer so elects, was in

the top-paid group for the preceding year.

Part XIV (Section 4971(f))

Preparing and

An employee is in the top-paid group for

sending the form

Tax on Failure to Correct Liquidity

any year if the employee is in the group

to the IRS . . . . . . .

9 hr., 37min.

consisting of the top 20 percent of the

Shortfall

employees of the employer when ranked on

If you have comments concerning the

Section 4971(f). If your plan has a liquidity

the basis of compensation paid. An

accuracy of these time estimates or

shortfall for which an excise tax under

employee (who is not a 5-percent owner)

suggestions for making this form simpler, we

section 4971(f) is imposed for any quarter of

who has compensation in excess of $85,000

would be happy to hear from you. You can

the plan year, complete lines 38 through 41.

is not a highly compensated employee if the

write to the Tax Forms Committee, Western

Line 38. Include on line 38 the amount of

employer elects the top-paid group limitation

Area Distribution Center, Rancho Cordova,

the liquidity shortfall(s) for each quarter of

and the employee is not a member of the

CA 95743-0001. Do not send this form to

the plan year.

top-paid group.

this address. Instead, see Where To File on

Line 39. Include on line 39 the amount of

page 2.

The “excess contributions” subject to the

any contributions made to the plan by the

section 4979 excise tax are equal to the

due date of the required quarterly

amount by which employer contributions

installment(s) which partially “corrected” the

actually paid over to the trust exceed the

liquidity shortfall(s) reported on line 38.

employer contributions that could have been

made without violating the special

-6-

Instructions For Form 5330 Page 6

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