Following facts: Plan is top heavy and ADP of NHCEs is zero and ADP of HCEs is 1.8. ADP refunds will be given to bring HCEs to an ADP of zero. Is top heavy minimum 1.8% or 0%?

The refunded deferrals are considered annual additions, so I believe the answer to be 1.8% even though 1.416-1 Q&A M-20 doesn't specifically reference annual additions.

That is my initial thought then I started drinking, one thing led to another, and I had lost confidence in my initial thought.

i thought the t-h minimum would be the highest rate contributed to a key employee. so if you had 1 key at 2.0%and 1 at 1.6%, the t-h would be 2%

and remember, it is the rate to a KEY ee, not hce.

Correct.

I mispoke in my first post. My highest HCE has 1.8%. Sorry for the confusion.

Why the ADP refunds if the NHCE/HCE gap is less than 2%?

The regs state the lesser of 2+ or 2 times. The lesser is two times zero.

401(k)(3)(A)

(ii) the actual deferral percentage for eligible highly compensated employees (as defined in paragraph (5)) for the plan year bears a relationship to the actual deferral percentage for all other eligible employees for the preceding plan year which meets either of the following tests:

(I) The actual deferral percentage for the group of eligible highly compensated
employees is not more than the actual deferral percentage of all other
eligible employees multiplied by 1.25.

(II) The excess of the actual deferral percentage for the group of eligible
highly compensated employees over that of all other eligible employees
is not more than 2 percentage points, and the actual deferral
percentage for the group of eligible highly compensated employees is not
more than the actual deferral percentage of all other eligible employees
multiplied by 2.

(emphasis added)

EDIT: Beat to the punch

if, on the other hand
ee is age 50 or older and
plan allows catch up contributions
then at least part of the deferrals would have to be treated as catch up, and these amounts are not counted when determining the top heavy %.