When running ADP Test, are deferrals that participants made in excess of 402(g) limit ($10,000 in 1999) counted, or do you only count the deferrals up to the 402(g) limit? Our client had several participants who exceeded $10,000 last year. Corrective distributions were made earlier this year, however, we need to confirm treatment in ADP test.

For HCEs, amounts contributed in excess of the 402(g) limit are included in the ADP test. For NHCEs those amounts are not included.

I don't have a cite handy, but I'm sure you'll find it somewhere in 401(k).

It is also likely that you'll find it in your plan document. Buried in the deferral language is often a reference to the limit and how and excess is handled. Disco Stu's synopsis is correct.