Yuku free message boards

What was the nature of the overpayment? Was it due to an ACP test failure? IE: Were you considered a Highly Compensated Employee? I think more information is needed to answer this question properly.

I don't know if this applies to your situation. I found this in the IRS' FAQ section regarding an improper distribution. I offer it as a possible solution, and only because your question has been unanswered for a couple days:
"The company should take reasonable steps to ensure that Jim returns the erroneously distributed amounts to the plan. Jim should also be advised that to the extent any amounts are not returned, they are not eligible for tax favored treatment (i.e., the amounts are not eligible for rollover to an IRA or other retirement plan)."

If you don't pay it back, you will likely get a 1099-R for the $600. If it has been determined that the $600 was ineligible for rollover into an IRA or 401k, the institution that took this money for you will have to resolve the fact that they improperly allocated this $600 as a rollover. IE: (Paying the $600 out of your pocket) won't solve all your problems in this case.

This (potentially) is a problem that has snowballed and is now effecting 3 parties:
The company that laid you off,
you, and
the company that took the rollover - I'm assuming you rolled it over (you wrote "I moved it").

Thanks,

Fender
www.401ktest.com