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Employer erroneously withheld (and made) Roth deferral elections for a few years.  Participant did not realize but question is what is the correction?  No Code (402(g), 415, etc.) violation but if the amounts are distributed, would the entire balance be taxable or just the earnings?  Assume not subject to 10% excise tax on early withdrawals as it would be a corrective distribution.  Better approach would seem to be to have the participant make an election going forward but interested in any other thoughts from those who have seen this before.      

  • 4 weeks later...

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