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Facts: 401k Safe Harbor with Cross Tested Profit Sharing. Employer formed LLC effective 1/1/2021, was sole-prop for 20+ years prior to this. First payroll date was technically 1/12/2021, with bi-weekly payroll thereafter, however, the new LLC bank account was not yet established so all employees were paid a reasonable "Advance" on 1/12/2021 equal to estimated pay (estimated hrs * hrly rate reduced for estimated taxes etc). All employees are hourly paid. It should be noted the 401k estimated deferrals were not remitted over to the plan at this time. The plan was to reconcile all with the 1/26/2021 pay date, in the new LLC account with the new system being implemented. Thereafter the new LLC business account was established, new system set-up, and the first official payroll was processed for 1/26/2021 pay date. With this payroll, the bookkeeper logged all hours year to date (i.e. including hrs for pay date 1/12) making gross wages correct for year to date (both 1/12 and 1/26). Taxes and 401k* were determined, the "1/12/2021 advance" figures reflected, and the resulting net pay to employee determined. *Herein lies the problem: only 1/26 pay date's 401k amounts were accounted for, missing were the 1/12/2021 amounts. Total 401k reported as of 1/26/2021 $956.25 -- this amount was short by the 1/12/2021 payroll's total 401k withholding $922.50. Good news/bad news: The bookkeeper caught her mistake when she remitted the deposit over to the Plan and deposited $1,878.75 -- 1/12/2021's $922.50 plus 1/26/2021's $956.25. (This 1,878.75 matches the employee deferral elections in place and gross wages paid.) Only problem was she never went back into payroll and made adjusting entries to "account" for the correct 401k amounts remitted over to the Plan. Therefore, the three participants affected received the $922.50 in their net pay (i.e. in their pocket). Because of this the W2s are correct as issued. Questions: Can the $922.50 be deemed an employer corrective contribution and a notice issued at this time, or, should it be considered an "unallocated suspense" amount to be applied at a later date? My concern with the former is that it is more than the prescribed correction -- is this acceptable (can correction be more than guidance prescribes) or is it prohibited?? And if the latter, can the employer apply it towards the 2021 Safe Harbor (3% non-elective) contribution to be deposited by 10/15/2022? If the $922.50 can not be deemed an employer corrective contribution at the time is was deposited, a correction is needed for the missed deferral opportunity (1/12/2021 pay date). Is it the missed known amount per participant or 50% of the average NHCE deferral rate? All employees are still employed; no Correction Notice has been distributed. It is a balance forward plan. Thank you so much.

This is for a cross tested 401k Safe Harbor plan that provides: 1 year eligibility for 401k, employer SHM, optional/discretionary ACP SHM and PS Immediate eligibility for Davis Bacon/Prevailing Wage type contribution Vesting is 2/20 for PS and optional ACP SHM 100% immediate Vesting for 401k, SHM and DB/PW type contributions The DB/PW provision states (N/S VS doc): "The Employer will make a Prevailing Wage Contribution on behalf of each Participant who performs services subject to the Service Contract Act, Davis-Bacon Act or similar... The Prevailing Wage Contribution shall be an amount equal to the balance [emphasis mine] of the fringe benefit payment for health and welfare for each Participant (after deducting the cost of cash differential payments for the Participant) based on the hourly contribution rate for the Participant's employment classification as designated on Schedule A as attached to this [Plan] The PW contribution is defined as non-elective (but specifically not a QNEC) and shall be used to offset the employer's contributions (other than ADP test SH contributions) The employer has a DB/PW job coming up and would like to contribute the fringe portion (or at least a portion of it) to the plan. It should be noted there have been other jobs subject to DB/PW completed in the past (while plan has been in place) whereby the basic wage and fringe were both paid in cash (i.e. wages). Will it be sufficient for the employer to provide advance notice to the affected employees that on Job X, $#.## per hour will be contributed to the Plan in lieu of cash payment in accordance with DB/PW? These contributions/hours will be tracked within payroll and plan record kept separately (i.e. own source bucket). It is okay for the employer to choose whether or not to contribute the DB/PW amounts from job to job, and how much of the fringe portion amount from job to job, in a discretionary manner so long as advance notice is provided to affected employees and the hours/contributions are tracked/record kept accordingly? It would appear to be permissible since the Plan's wording states the contribution to the Plan is the "balance"... (see above). Apologies for the length of this post. Thank you