Restoring lost earnings on tardy matching contributions; are these amo

[Guest tmconn]

My company failed to fund matching contributions timely, and is therefore restoring the earnings lost on the unfunded match. My question is, is this a QNEC or is it simply lost earnings, which are not considered for the purposes of annual additions and ADP/ACP testing?

[Guest MTransue]

I'm curious as to more background information regarding the scenerio... What is the plan year end? Has the employer filed it's corporate tax return? Was there a positive return on your assets for the plan year?

The earnings wouldn't be included in the ADP/ACP test. Nor would they be considered for the 415 or 410(B) coverage tests.

However, in IRS Rulings I've seen, the earnings are not deductible under IRC 404.

[Richard Anderson]

The earnings, although not deductible under 404, are deductible under Section 162.