Our new client.... adopted a 401(k) PSP with safe harbor non-elective language. Effective 4-1-02 with year end of 3-31.
All went well, until at end of year, CPA notices that SIMPLE and 401K amounts are on the W-2 (which they didn't have a problem with) and when combined one individual was over the $ limit.
Brought to our attention in mid-Feb when an excess contribution distribution was requested.
Financial advisor said they could do this because they terminated the SIMPLE on 3-31-02 and didn't start the 401k until 4-1-02.
What steps do we take to correct this? As I'm quite certain you cannot have the 401k and the SIMPLE in the same calendar year (boy I wish/hope I'm wrong).