ADP Test failure was not as bad as thought=>overpmt to HCE

[TPApril]

Plan has one HCE who is not an owner. ADP test failed and HCE received $15,000 in excess contributions.

ADP test was rerun and determined that too much in excess contributions were distributed earlier this year (ie no 1099-R issued yet) and refund should have only been $10,000.

HCE is happy to return the $5,000 to the plan in order to reduce tax liability.  Earnings that were added on to the refund will be prorated and returned as well.

Ultimately the 1099-R will reflect the lower amount..

I believe this is an acceptable correction, but not sure if we need to calculate earnings on that amount since it was refunded to include with the repayment..