Missed Eligible 401(k) Participant - Help!

[Jilliandiz]

Participant made a 401k election for 2007, however the Employer did not withhold any 401k money for the participant, in error. The employer found the error and made the participant whole for 2007, by depositing the corrected amounts in 2008 to make the participant "whole" for 2007.

1. Does the 2007 ADP/ACP test need to be rerun for 2007 with the correct information?

2. Or is the 2007 corrected deposits applied to 2008, since the deposit was made in 2008?

3. What about the taxes? Does the employer get a tax deduction for these corrected contributions, and if so, is it for 2007

or 2008? Does the participants payroll get affected?

Anything else you think I might be missing. I know this is common, but this is the first time I've had it cross my desk.

Thanks for the help!

[Tom Poje]

see EPCRS Appendix A .05(5)(g) plan may disgregard ee who were improperly excluded.

since a QNEC is made, then nothing should effect the participant's payroll.

Contributions (including make up contributions) I think are only deductible in the year they are made (or if made by tax deadline to the prior year)