Can nondeductible quarterly contributions be returned to the employer?

[Guest pension222]

I know that this issue has been addressed many years ago but I have never run into it before.

If the client makes minimum quarterly contributions based on the prior plan year valuation results and then finds out that the plan is at full funding for the current plan year and no contributions are deductible for the current plan year, can the client have the (nondeductible) quarterly contributions back? If so, what is the process to get them back?

The document allows the employer to recover a contribution if it was made as a mistake of fact or the deduction for the contribution is disallowed under Section 404 of the Code.

I seem to remember some deminimus return of nondeductible quarterlies if they did not exceed $25,000 but it's been a while so I could be wrong.

I'd appreciate any cites you can give me to support the answer.

[david rigby]

See IRS Notice 89-52, Q&A 16.

[Guest]

You might have better luck with Rev. Proc. 90-49, especially Sec. 4.