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Showing results for tags 'ineligible participant'.
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hello - I have a client where the payroll dept allowed an employee defer into the plan prior to meeting eligibility. The Trustee does not want the participant in early. Therefore, i need to distribute the mistaken deferrals. It does appear that a correction method is to have the investment company return the deferrals adjusted for gains or loss. There is no mandatory withholding. I've read that some have done it as EPCRS or as a 402g. Which is correct way to complete? Thank you!
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An employer allowed an employee to begin deferring in 2017, but they are not eligible until 2018. The employer does not want to use the EPCRS amendment correction method so that the participant would be eligible for 2017, since they would be required to provide a top heavy minimum allocation. If the early deferrals plus gain/loss are returned to the participant, what 1099 code should be used? It seems like it should be a 2017 tax event.
