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Thank you Bill

Well, that's what the CPA would like, and to a certain extent, I understand where he is coming from. Let's say he defers maximum in 2020 based upon the draw, but it turns out there is really a $250,000 loss. If this amount had not been deferred, his loss would still be such that he has zero taxable income. So in a way, this is turning non-taxable funds into taxable income. Sort of a doubly whammy in a way. I'm just not aware of any applicable special reporting code for the 1099-R that states that the distribution is non-taxable, but I want to be sure I'm not missing something.

This

The reference in question is 1.401(m)-2(a)(5)(iv) Since the reg says a plan is "permitted to" disregard the match (not required to) it follows that a plan is also permitted to include the match.