Is a Safe Harbor 401k matching contribution to a shareholder of an S-Corp a K-1 add back item?
Gladicouldhelpu asked:
If an S-Corp pays matching contributions to a shareholder as part of a Safe Harbor 401k plan, does the shareholder get the benefit of the deductable expense or is it a k-1 add back item?
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If an S-Corp pays matching contributions to a shareholder as part of a Safe Harbor 401k plan, does the shareholder get the benefit of the deductable expense or is it a k-1 add back item?
May 3rd, 2009 at 4:37 pm
I’ve searched Revenue Ruling 91-26 and Publication 15B and can find no mention of a matching 401k contribution listed as a fringe benefit.
The matching contribution is a deduction for the S Corporation and not taxable income to the shareholder.
The only item to report to the shareholder is the reduction of gross wages on the W2 and the entry in box 12 of the W2.
May 4th, 2009 at 10:07 am
EADave is 100% correct. Give the man some points…