Solo 401K - Employer Matching Contribution Question

[drsuperior11]

I am a sole owner LLC that files an 1120-S and receives a K-1 from TT Business.  2020 is the first year for the Solo 401K (formerly contributed to a SEP).  The employer matching contribution is being reported on line 17 on the 1120-S.  My question is, do I list the employer matching contribution within TT Basic or leave it blank and only show my personal elective deferral and catch up contribution?  I believe I should leave the employer matching contribution blank since it was already reported on the 1120-S.

Thank you for your help!

[MinhT1]

The employer matching contribution is a deductible expense for the S-Corp and is reported on line 17 of form 1120S for the S-Corp.

As an employee-owner of the S-Corp, your personal elective deferral should be reported on your form W-2 as it should be a deduction from your paychecks. It should be reported in box 12 of your form W-2 with code D. The employer contribution is not reported on your personal tax return.

[drsuperior11]

Thank you - that's what I thought.

The reason that the personal elective deferral and catch up contribution were not reported on my W-2 is that I choose to fund the Solo 401K at the end of the year in one lump sum.

[dmertz]

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@drsuperior11 wrote:

Thank you - that's what I thought.

The reason that the personal elective deferral and catch up contribution were not reported on my W-2 is that I choose to fund the Solo 401K at the end of the year in one lump sum.

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The S corp must deposit your elective deferrals made from your pay.  Your lump-sum elective deferral at year-end is only permitted if the election to make an elective deferral was made by year-end, the S corp withheld the amount of the elective deferral from your last paycheck of the year and the S corp deposited it into the 401(k).  The S corp must then report the elective deferral with code D in box 12 of your W-2.

[drsuperior11]

Thank you for your reply.  I have an audit trail of the business account funding their portion of the contribution to the Solo 401K account and my contribution to the Solo 401K being funded from my personal account before year end of 2020.

[dmertz]

Funding the elective deferral directly from your personal account is a bit improper.  It has to be effectively treated as the S corp retaining the elective deferral amount and the S corp making the deposit so that the S corp can report the elective deferral with code in box 7 of the Form 1099-R as required.  The amount of the elective deferral must also be excluded from box 1 of your W-2.