Unfortunately, you don’t have enough information for us to answer the question either. To start with, we would need to know what type of plan it was, and why the contributions were refunded. I don’t understand why the contributions would be refunded at all. That suggests to me that his membership in the retirement plan was canceled or that he was deemed ineligible. If he was a participant in the retirement plan, his contributions would have gone into the plan, and been the basis for retirement payments that would be reported on a form 1099R. If his contributions were refunded, that suggest that, somehow, he was never part of the plan in the first place. Which strikes me as very odd, and I would need to know a lot more about the situation to understand what is being claimed.
In general, if the contributions were made from his paycheck after tax, they would not be taxable when returned. But if the contributions were made by pretax payroll deduction, or if the contributions were made by the employer, and not included as part of his taxable income, then they are taxable now. But that’s only a general statement and much more specific information is needed.
