Is 401K employer contribution match subject to ss & medicare taxes ?

[mircpa]

Hello

I have a question regarding 401K employer contribution. Client is owner and husband/wife employees of an S corporation. Both husband and wife has W-2 and contributed 12,000.00 towards 401K plan and equal amount was matched by employer. I know I can take deduction of 12,000.00 on line 17 of 1120S for employer's portion of match. My question is since employee is required to pay ss & medicare taxes on 12,000.00, does employer is also required to pay ss & medicare taxes on 12,000.00. I try to do research I found conflicting answers, some says employer require to pay ss & medicare and at some places it says employer match is not subject to ss & medicare taxes. Can sombody answer my question or point me to some publications.

[Richcpaman]

Mir:

The $12k that was deducted from the employee's pay is subject to Fica and MC tax. The employer must match this.

As for the $12k employer contribution to the plan, there is no FICA and MC tax.

What was the gross payroll check?

[mircpa]

W2 Line 1 wages are $ 48,000, Line 2 & 3 social security & medicare wages are $ 60,000.00.(These amounts are total of 2 W2's both husband and wife)

[Richcpaman]

That $12k for the "Match" in a 401K seems kind of high for a 401K plan on 60K in gross salary.

I am not the expert on 401k's in that respect. If its a single owner and spouse plan, maybe so.

Rich

[jshtax]

The deferral portion is subject to medicare/ss tax. 480000 fed and state(for most of them) taxable 60000 gross subject to payroll taxes. The match is a straight write off and not subject to any payroll taxes. The match on a 401k can go as high as 25%. I have some people make 40000 deferring 23000 and matching 10000 for a total contribution of 33000.