When are HCE refunds included in income?

[oriecat]

On another board I am on someone posted that their recordkeeper said that starting this year, the refunds to HCEs due to failing non-discrim would be taxable in the year refunded instead of the plan year so the HCEs would not need to wait to file taxes. Is this true? Has anyone heard anything about this? Thanks

[dmwe]

This rule change is for plan years starting in 2008, so refunds processed in early 2009. Gap period income also goes away in 2009.

[oriecat]

Thank you! Do you know the source of this rule change?

[Tom Poje]

1.401(k)-2(b)(2)(vi)(A)

if I am reading the proposed amendments correctly

see page 24 of your very own copy found here

http://www.psca.org/pdfs/TREASprop-autoenroll.pdf

[oriecat]

Thank you, Tom!