Sole Prop with No Income

Sole Prop, sponsor of SH Match 401k Plan, makes 401k and match contributions to himself during year.

Turns out he has loss for the year.

I feel pretty comfortable refunding the 401k to him as a 415 violation but what about the match. 

Can that be refunded also or should it be reallocated?  (Causing TH SH exemption to be voided and then requiring a TH minimum to a number of employees .)

Thank you for any comments

Regarding the contribution, I think it is actually better described as a mistake of fact and would follow those rules.

As to the match, while I have not studied that issue, I would think the same thing applies which would allow it to be refunded.

The mistaken fact was a mathematical error on the size of his earned income.

The match follows from the same error.  

Hope this is helpful.

Also, there may be some flexibility with funded an additional discretionary match to the other employees that meet the ACP Safe Harbor while still avoiding TH.

Good Luck!

Thanks very much.  

Is the sole prop the only key employee?  If so, then if no Key is getting any annual additions....

If the only contributions are 401(k) and SH Match, is there a Top Heavy issue?