As a plan sponsor or administrator, you have a few tasks to complete to close out the current plan year and start the new one. All Gusto 401(k) plans run on a calendar-year basis, so Jan. 1 marks the start of your new plan year, regardless of your company's fiscal year. This article walks through what to do before year-end and what to expect once the new year begins.
Completing these tasks before your plan year ends helps make sure your year-end filings are accurate and on time.
Make sure we have accurate information about your owners and officers by completing the Company Information task on your dashboard
Let us know if you have switched or plan to switch payroll providers. Learn more about how to report a payroll provider change
Confirm your 401(k) roster is up to date and includes any new hires or dismissed employees
Review your projected compliance results in the Compliance status section of your administrator dashboard. Go to the Compliance page in your 401(k) dashboard for more details.
Safe harbor 401(k) plans automatically satisfy most nondiscrimination testing requirements
If you are part of a legally related group, you will not have access to full compliance projections due to the complex nature of your results
Confirm that owner contribution elections for those with self-employed income are elected no later than Dec. 31. This applies even if the participant wants the contribution to be made in the following year for the current plan year.
Bonus payments cannot be excluded from your 401(k) contributions, even if they are paid in a separate payroll. If participants get a bonus, let them know they can temporarily adjust their deferral rates through their 401(k) dashboards before the payroll runs. Any applicable employer nonelective contributions and match will apply to bonus pay as normal.
All payrolls with a pay date on or after Jan. 1 count toward the next plan year's contributions, regardless of whether the work was performed in the previous year. For 401(k) plans, compensation is counted when it is actually paid, not when it was earned.
Any employees who reach annual limits before the end of the year may have contributions capped by our system to prevent overages.
Note: Special or bonus payrolls automatically sync with your 401(k) if you use Gusto payroll. For self-service plans, let us know in advance by following the instructions for reporting a special payroll.
Toward the beginning of the new plan year, we will send you tasks on your administrator dashboard when it is time to handle certain actions. Here are several tasks you may need to complete:
Report compensation and self-employment income for each participant. Learn more about the timing expectations for this task.
Make additional employer contributions with profit sharing. Learn about the benefits of profit sharing.
If your plan failed any required nondiscrimination tests, you will need to make the necessary corrections as outlined by the Internal Revenue Service (IRS).
If your plan requires year-end adjustments to employer contributions, learn more about why year-end plan adjustments may occur and what to expect.