Leaderboard

would you need to reissue 1099-Rs with corrected codes to show the regular distribution and the corrective distribution?

I'm amused because Boris Badenov himself seems to have started the prior discussion. (I know...."I always have fiendish plan!!")

Sounds like a missed deferral opportunity to me: https://www.irs.gov/retirement-plans/fixing-common-plan-mistakes-correcting-a-failure-to-effect-employee-deferral-elections

The definition of target normal cost in 430 specifically says that you can include increases in compensation for the current year. However if you are changing the data elements used to determine the current year comp, then that would be a change in method that requires approval as @digger said.

I'm not 100% sure of the situation but it is possible to have $6K of catchups here. If you allocate $38.5K as PS, then you have total allocations of $61K and can determine that $6K of deferrals were catchup and $16.5K regular. In other words the 415 limit is in fact $61K. I like to say that we determine catchups (after some limit is reached), not the participant or the payroll company. Likewise a participant cannot defer $6K and say it is all catchup (e.g. to improve ADP testing results). If no limit is exceeded, it's not a catchup.