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incorrect deferral withheld


Chippy
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For the 11/27/2020 payroll the payroll company did not withhold deferrals from a bonus.    Can this be corrected?   The employer is asking how to correct it and I'm not sure there is a way.   It wasn't caught at the time, the employer just realized it last week.   

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See EPCRS:

(5) Failure to implement an employee election. (a) Missed opportunity for elective deferrals. For eligible employees who filed elections to make elective deferrals
Page 88 of 140
under the Plan which the Plan Sponsor failed to implement on a timely basis, the Plan Sponsor must make a QNEC to the plan on behalf of the employee to replace the “missed deferral opportunity.” The missed deferral opportunity is equal to 50 percent of the employee’s “missed deferral.” The missed deferral is determined by multiplying the employee’s elected deferral percentage by the employee’s compensation. If the employee elected a dollar amount for an elective deferral, the missed deferral would be the specified dollar amount. The employee’s missed deferral amount is reduced further to the extent necessary to ensure that the missed deferral does not exceed applicable plan limits, including the annual deferral limit under § 402(g) for the calendar year in which the failure occurred. The QNEC must be adjusted for Earnings to the date the corrective QNEC is made on behalf of the affected employee.

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QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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