At the beginning of 2017 the client's compensation definition was W-2 wages excluding fringe benefits. A bonus was paid to one NHCE, from which they did not withhold deferrals or pay the match. After being reminded by the TPA (me) that they were supposed to treat bonuses just like any other pay check, things got out of hand.
The payroll person withheld the amount that should have come from the bonus check from the next regular pay check.
Not realizing this had occurred, we instructed them to make a 50% QNEC and 100% of the match. (Too late for reduced QNEC.) Instead, they deposited a 100% QNEC and 100% of the match.
All deposits were made in 2017.
How do we fix this? And which amounts do we use in the ADP test?