My employer made a profit-sharing contribution into my 401k, and they are including it in my taxable income.

1) Is this contribution taxable? I think it is not taxable. The IRS says: "Your employer's contributions to a qualified retirement plan for you aren't included in income at the time contributed."

2) Since my employer has included this money in box 1 of my W-2, which I believe to be incorrect, I am planning to file a form 4852. This is the official substitute for form W-2 when that form is incorrect. I assume that the IRS has some adjudication process for this, possibly just with me, possibly with me and my employer. What will the IRS do when I file the form 4852?

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    Did you ask your employer why the listed the contribution this way, and/or if they will issue a corrected W-2? – yoozer8 Apr 3 '19 at 12:10
  • @yoozer8, I asked, and they said "the profit sharing should be included in Box 1". – Matt F. Apr 3 '19 at 13:45
  • Can you tell in your 401(k) account whether the profit sharing contribution is being counted as a before-tax or after-tax contribution? Like you, I've only heard of profit sharing being a before-tax contribution, but it's possible they're doing something unusual but "correct" here. Is there information in the Summary Plan Description about the nature of the profit sharing contributions? – user42405 Apr 4 '19 at 17:52
  • @PeterCooperJr., the Summary Plan Description says "contributions made on your behalf, and any earnings in your account are not subject to current income taxes until they are paid to you from the Plan" -- thanks for suggesting I look there, I will cite this when I escalate higher internally or in the 4852. – Matt F. Apr 4 '19 at 21:11

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