Do the Employee Profit Sharing Plans (EPSP) need to be reported on 3520 or 3520A?
Or do I only need to include the dividends earned in 2014 on 1099-Div?
Do EPSP (Employee Profit Sharing Plans) require 3520/3520A?
Moderator: Mark T Serbinski CA CPA
Re: Do EPSP (Employee Profit Sharing Plans) require 3520/3520A?
For future readers, not a tax lawyer, but, i find that this depends on the plan details.
In my case, the EPSP (employer match) is 50% of the employee contributions.
Consequently, while it's a 402(b) trust, since my contributions are non-incidental, it triggers grantor trust rules on the employee contributions portion, requiring form 3520a.
Perhaps there's an argument to be made in the case where employee contributions were contributed by the employer on behalf of the employee via elective payroll arrangements. However, my research has indicated that if your trust details employer and employee sections, and the amount attributable to employee contributions is >50%, then you may be considered U.S. Owner of a Foreign Trust.
In my case, the EPSP (employer match) is 50% of the employee contributions.
Consequently, while it's a 402(b) trust, since my contributions are non-incidental, it triggers grantor trust rules on the employee contributions portion, requiring form 3520a.
Perhaps there's an argument to be made in the case where employee contributions were contributed by the employer on behalf of the employee via elective payroll arrangements. However, my research has indicated that if your trust details employer and employee sections, and the amount attributable to employee contributions is >50%, then you may be considered U.S. Owner of a Foreign Trust.