What penalty will I have to pay for a 401K plan discrimination refund?

B

BaseballFan4Ever

New member
Due to our company failing the 401k Discrimination test, I as a Highly Paid Executive will receive about a $5,500 refund in early 2011.
- How will this affect my taxes?
- Will the $5,500 be taxed as ordinary income?
- Will I pay a penalty?
- What should I do with the $$?

Thanks
 
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