Q: I recently read an Ask the Experts Column from 2011 which indicated that, for Form W-2 tax reporting purposes, the "Retirement Plan" box should be checked for an employee if he/she is eligible for a defined benefit plan and actually receives a contribution or makes a deferral in the tax year in question to a defined contribution plan such as a 403(b) or 401(k) plan. Employees eligible to participate in a 403(b) or 401(k) plan who do not actually make deferrals or receive contributions in a tax year should NOT have the "Retirement Plan" box checked. Does this information remain current and accurate, especially in light of recent Form 5500 changes regarding participants that mean only those individuals with account balances are counted for reporting purposes?
Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:
A: Indeed, our column from 2011 remains current and accurate in this regard. The new Form 5500 participant counting requirements, which were the subject of a more recent Ask the Experts column, only relate to the Form 5500 annual reporting requirements for Employee Retirement Income Security Act plans and have nothing to do with Form W-2.
Whether the "Retirement Plan" box should be checked is not based on account balances, but whether the participant received a contribution or made an elective deferral to the plan in question in the tax year covered by the Form W-2. Thus, the Form W-2 reporting requirements remain the same for defined contribution plans: If deferrals or contributions were made, then the box should be checked; if not, the box should not be checked.
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