Per IRS (see the link below) S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made to the shareholder-employee. The amount of reasonable compensation will never exceed the amount received by the shareholder either directly or indirectly. S Corp Compensation and Medical Insurance Issues
Assuming that the shareholder provides a service to the Corporation, for the S Corp to be in compliance, they could "gross up" the distributions taken in 2019, to cover the required payroll taxes.
If they do this, the distribution plus the required taxes "withheld" would be considered 2019 wages. The required State and Federal payroll tax returns would need to be filed, and the payroll taxes paid.
In addition to the paperwork required, there would, of course, be penalties and interest for failure to file and pay the payroll tax returns and remit the taxes on time, but this would bring them into compliance.
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