My wife changed employers in 2023 and rolled her 401(k) to a new employer's plan the same year. The previous Administrator later notified us (on 2/22/24) that she had excess 2023 contributions under their plan because the ratio of HCE and NHCE was non-compliant. Even though the excess amount was completely transferred to the new plan as part of the original rollover, the old plan sent us a revised 1099-R showing the corrected amount that should have been rolled, and another 1099-R showing the excess amount as untaxed distribution income in 2023. Meanwhile, the new Administrator has just been made aware of this situation, and they say that because the 2023 excess was initially sent to them as part of the original rollover, they will refund us the excess amount and it then has to be reported as income to us in 2024. This can't be right; we should not be taxed on this amount in 2 different years. Can somebody shed some light on this for me? Who is correct and how do I report this for 2023? We have not yet been refunded by either plan.
