402(g) limit is exceeded

Hi

Here is a new one for me.

401k plan with 3% NESH and PS provisions so no ADP testing required. This is combined with CB plan and tested together. (I only handle CB plus testing)

Just got the info for 2022.

HCE/owner and spouse, both exceeded 402(g) limits (changed payroll companies in mid-year and they did not pay attention to the deferrals). Refunding prior to 4/15/2023.

If ADP tested, the full amount would have been included, only for HCE's. Do not have any issues with the NHCE's.

How for ABPT? Based on 2022 limits (20,500) or full incorrect deferral (30,000)? Assume under age 50.

Thank you.

It's been a while since I researched but if my memory is correct for HCEs you count the full amount for all testing including ADP, 415 and any other nondiscrimination testing, even if properly refunded.

I saw the ADP part but not the ABPT part. As this is deferral related, not sure if the excess should be part of 401a4. Could not find anything yet.

Hoping someone had to deal with this before (sadly)

I think it counts in the testing, unless you can also show it's also a 415 excess because of extra-large profit sharing.  But it would take me an hour to dig to find where I got that from.

It counts in the ADP regardless and in 415(c) only if not timely corrected by 4/15.  I guess it would then be part of the ABPT too, but I fail to see how you could include it in 401(a)(4).