I'm looking for specific guidance on the determination of what deferrals can be characterized as catch-up contributions for an off calendar plan year. My specific example is this; An owner defers $1000 per month during 2003 and another $10,000 during the first 6 months of 2004. Its a 6-30-04 plan year and he has deferred a total of $16000. If the plan fails the test and the maximum he could have deferred is, say, $12,000, can I consider $4000 to be catch-ups? We can use $3000 as 2004 catch-ups for sure, but can I count $1000 as 2003 catch-ups? He didn't exceed the 402(g) limit in 2003, but are we allowed to re-charaterize due to the ADP failure? I've looked around for guidance, but have come up empty so far.

The catch up contribution is determined at the end of the plan year. You will find this rule in the final catch-up regs. It is my understanding that this means that the applicable catch-up limit is subject to the limits for the calendar year in which the plan year ends. In your situation the catch-up would be $3,000.

Yeah. The more I look at it the more clear it is that I could only count some of the 2003 contributions as catch-ups if they exceeded the 2003 402(g) limit. I can only recharacterize up to the catch-up limit for the calendar year in which the plan year ends, as you say.
Thanks