Top Heavy Determination

[Guest Jodi]

In determining top heavy status for a plan (of which this is the first year) and the ADP test does not pass and a portion of the contributions need to be refunded to a key employee, can I subtract the amount of the corrective distribution from that employee's account balance as of the determination date in computing top heavy status?

Thank you for your assistance in this matter.

[Tom Poje]

it's a distribution. Therefore you will keep track of it for 5 years