We have an employee that took a cash distribution early in 2017. Employee has since been rehired and wants to restore her account as there was enough non vested monies forfeited to warrant the restoration.
I'm all good with the employee sending back the entire amount and us restoring her account. No real problem there.
My question is really for me as I am curious. What about the 20% withholding already done on the cash out? A 1099-R will be sent on the cash out. How does the employee rectify or "get back" the withholding? I'd assume at tax filing of her 2017 taxes, but I don't know. Maybe she doesn't get the taxes "back"...
Just curious.