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I would treat the rollover back to Plan A as a non taxable rollover. If it is treated as taxable income how can it be rolled back to the plan? As far as Plan B is concerned the amount returned is part of a rollover distribution from Plan A. Since plan A made the mistake of distributing an incorrect amount the employee should be held harmless. Plan B should file a 1099 for a rollover back to plan A since Plan B is treating the returned amount as pre tax rollover. I don't see any reason for different treatment if the returned amount comes from an IRA.