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Compliance February 20, 2013
IRS Finds Excess Deferral Reporting Errors
February 20, 2013 (PLANSPONSOR.com) – During its 401(k) Excess Deferral Project, the Internal Revenue Service (IRS) found errors in elective deferrals reported in Box 12 of Form W-2.
Reported by PLANSPONSOR staff
Responses showed that 75% of the employers in the sample needed to correct their Forms W-2. Employers incorrectly reported as 401(k) elective deferrals in Box 12 elective deferrals made to 403(b) or 457 plans, or other non-qualified amounts.
Employers also made errors in reporting Social Security wages and deferred compensation, and used incorrect codes.
To correct their previously filed Forms W-2, employers filed more than 26,000 Forms W-2C, Corrected Wage and Tax Statement. Because of the compliance contact, most of these employers became aware of software and data transmission problems when moving files back and forth with their third-party administrator or payroll vendor and took action to fix those problems for future W-2 filings.
More information is here.