"Plan had eligibility of age 18, 1 year of service and 1/1 & 7/1. Employee hired 5/8/2020, terminated 5/29/2020, worked 80 hours. Did not meet eligibility. The plan was amended 1/1/2023 to no service requirement, still age 18 and 1/1 & 7/1. The employee was rehired 1/20/2025, terminated 1/31/2025. Should the participant be eligible upon rehire?"

"Upon review, an ADP test from a few years back (> 2) was determined to have failed. (Prior TPA never ran the ADP test). Both of the two HCE's have since taken full distributions as Rollovers, and both would have had excess contributions distributed. Earnings have been calculated on those excess contributions through actual distribution date. The sum of excess contributions plus earnings would not have been eligible for Rollover. So we are thinking there would be 2 sets of 1099-R's issued for that prior year:

1. Amended 1099-R to reflect the lower amount that was eligible for Rollover
2. New 1099-R to reflect the excess con + earnings that would have been taxable

Just thought I'd see if there were any thoughts on this."