since they're issuing a 2021 1099-R (in 2022) the code on it will be 8 - return of contribution and earnings taxable in 2021
- Companies who fail discrimination testing are required to refund excess 401 (k) contributions. According to the IRS, employees, whose company fails discrimination testing, will receive refunds that are taxable in the year the refund is received, not the year the contribution was made.
