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A participant takes a hardship withdrawal and is suspended from hardships for 6 months in 2004. The employer unwittingly continues to take deferrals from the participant's pay. The vendor returns the money to the employer in 2004, but the employer doesn't cash the checks or take any action. Now it's 2005. How is the tax reporting handled? Are the 2004 W2 forms amended? Are the participants' federal and state taxes amended?

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