I filed already correcting for the 401K over-contribution just like turbo tax instructed.
Now employer is saying they cannot guarantee that the funds will be withdrawn from the 401K account before the end of the day today.
Do I need to file an extension? Am I doomed to be double taxed? What is the proper course of action at this point?
No, if you already filed you do not need to file an extension. Unfortunately, you will be double taxed on the over-contribution to your 401(K), once on your 2018 Tax Return and again when you withdraw the money in the future.
If you already included the over contribution as wages on your 2018 Tax Return, there is no other action you need to take.
For more information, you can check out IRS Pub 525: https://www.irs.gov/pub/irs-pdf/p525.pdf.