Deferral not offerred to eligible employee

[Jed Macy]

What is the IRS requirement to fully correct for mistakenly missing one eligible employee out of about 200 and not allowing him to defer into the 401(k) plan?

[ETA Consulting LLC]

The employer would merely contribute a QNEC for the missed deferral opportunity for that employee (and the matching contribution that would've been received). Rev. Proc. 2013-12 should be referenced to make the correction easy for you.

Good Luck!

[WCC]

Also review Rev Proc 2015-28 for correction guidance.

[Kevin C]

The two EPCRS Rev. Procs. cited cover a lot of different situations. The "pre-approved" correction method under EPCRS can vary significantly depending on the specific facts of the situation. For example, the correction for a 2 month exclusion is significantly different than the correction for a 2 year exclusion. I'll also point out that you are not required to use one of the correction methods from the Rev. Procs. Depending on the situation, other correction methods may be appropriate, but would need to be justified if the government looks at the plan.