HCE Posted March 7 Report Share Posted March 7 Buyer is purchasing Seller in a stock transaction. Seller has agreed to terminate Seller's 401(k) Plan immediately before the closing. After closing, Seller will perform final testing and make any necessary refunds. Is it possible to refund through payroll so the participant's W-2 is accurate, or must it be handled by 1099? For example: Before closing, Employee defers $22,500 in Seller Plan. After testing, Employee receives a $6,000 refund. After closing, Employee defers $6,000 to Buyer Plan. Would Employee's W-2 show $28,500 in the 401(k) Box (since payroll provider is the same), and also receive a 1099 to show the $6,000 refund? Or can we just adjust the W-2 to show $22,500 in deferrals for the year? Link to comment Share on other sites More sharing options...
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