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Showing results for tags 'payroll error'.
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How do you correct the following error? 401k Plan permits special elections for "irregular pay" and absent making an affirmative election, nothing should be withheld. Dec 2017 a small amount of deferrals were withheld from "Christmas" bonuses for some but not all employees. These deferrals however were never remitted over to the Plan as the employer never realized they were in fact withheld. This was just found with year end reconciliations and 5500 prep (off calendar fiscal/plan year). How best is this corrected? If remitted over to the plan they violate plan operation because they were not elected, should not have been withheld from payroll. Since withheld on a pretax basis, no income taxes were withheld on these amounts nor were the amounts reported as taxable income however social security taxes were withheld and amounts reported. Given all of this, is it best to remit them over to the plan along with corrective earnings and then do an amendment for those specifically affected for the specific paydate? Adjust via payroll somehow? Thank you!