FAQ 23: ADP--Catchup amounts mean zero refund for HCE

Problem: A test fails ADP, but the refund is to the only owner, who is over 50, and the amount of refund is less than $1,000. Because he is eligible for catchup of over $1,000, he won't receive a refund. Is this correct?

Solution: This is correct. Catchup amounts are calculated and applied toward ADP returns. For complete description of the catchup calculations, download the catchup documentation from the ASC website.