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1(k) Plan Chec
1(k) Plan Chec
klist
klist
This checklist isn't a complete description of
For Business Owner’s Use
all plan requirements, and shouldn't be used as
(DO NOT SEND THIS WORKSHEET TO THE IRS)
a substitute for a complete plan review.
Every year it's important that you review the requirements for operating your 401(k) retirement plan. Use this
checklist to help you keep your plan in compliance with many of the important rules. For additional information
(including examples) on how to find, fix and avoid each mistake, click on "(More)." See www.irs.gov/retirement
and click on "Types of Retirement Plans" for Fix-It Guides and other resources for 401(k) and other plan types.
1. Has your plan document been updated
within the past few years?
7. Are elective deferrals limited to the
IRC Section 402(g) limits for the calendar
year?
If your plan hasn't been updated to reflect recent law changes,
the plan needs to be revised.
Failure to distribute deferrals in excess of the 402(g) limit may
result in additional taxes and penalties to the participant and
employer.
(More)
2. Are the plan operations based on the
plan document terms?
(More)
8. Have you timely deposited employee
elective deferrals?
Failure to follow the terms of the plan is a common problem
found on audit.
You should deposit deferrals as soon as they can be
segregated from the employer’s assets.
(More)
3. Is the plan’s definition of compensation
for all deferrals and allocations used
correctly?
(More)
9. Do participant loans meet the plan
document and IRC Section 72(p)
requirements?
Your plan may use different definitions of compensation for
different purposes. It's important that you apply the proper
definition found in your plan document.
Defaulted loans or loans in violation of IRC Section 72(p) may
be treated as a taxable distribution to the participant.
(More)
(More)
4. Were employer matching contributions
made to appropriate employees under the
plan terms?
10. Were hardship distributions made
properly?
If a plan allows hardship distributions, the plan terms must be
followed.
matching contributions.
The plan terms must be followed when allocating employer
(More)
(More)
11. Were top-heavy minimum contributions
made?
5. Has the plan satisfied the 401(k) ADP
and ACP nondiscrimination tests?
If the plan is top-heavy, minimum contributions for non-key
employees are required.
nondiscrimination tests.
Most 401(k) plans must satisfy yearly ADP/ACP
(More)
(More)
12. Was Form 5500 filed?
6. Were all eligible employees identified
and given the opportunity to make an
elective deferral?
Many 401(k) plans must make an annual filing with
the Federal government.
By supplying your tax advisor with information regarding all
employees who receive a Form W-2, you may reduce the risk
of omitting eligible employees.
(More)
(More)
If you answered “No” to any of the above questions, you may have made a mistake in the oper-
ation of your 401(k) plan. This list is only a guide to a more compliant plan, so answering “Yes” to each question
may not mean your plan is 100% compliant. Many mistakes can be corrected easily, without penalty and without
notifying the IRS.
■ contact your tax advisor ■ www.irs.gov/retirement ■ call the IRS at 877-829-5500
Publication 4531 (Rev. 8-2018) Catalog Number 48552T Department of the Treasury Internal Revenue Service www.irs.gov
