Leaderboard

You didn't specify but I'm going with the assumption that payroll is biweekly: 1/11, 1/25, 2/1, 2/15, 3/1, 3/15, 3/29, 4/12, 4/26, 5/10, ... (A) Failure first occurred: 1/11/2019 (B) Last day of the three-month that begins on (A): 4/11/2019 (C) First payment of compensation made on or after (B) 4/12/2019 (D) Plan sponsor notified of the failure by affected eligible employee: 3/27/2019 (E) End of month after the month of (D): 4/30/2019 (F) First payment of compensation made on or after (E): 5/10/2019 Earlier of (C) and (F) : 4/12/2019 Correct deferrals need to begin no later than 4/12/2019.

Really it sounds like a two common problems - late contributions and a failure to withhold. These are not major problems as long as they are fixed. For the late contributions, calculate the lost earnings using VFCP. For the missed March deferrals, follow the prescribed correction methods set forth by the IRS and avoid penalties. The logistics of getting the money to the 401k or getting payroll fixed are another matter but I'm sure that can be figured out with some help from those providers. Step 1: Breathe Step 2: VFCP for February Step 3: Correct Failure to withhold deferrals for March. Just another day in small business 401k world, really.