You are correct The most you could contribute to a 401(K) plan for 2024 was $23,000.
If you are 50 or older, you can make catch-up contributions of an additional $7,500 per year in both 2024 and 2025. Your plan would have to allow for these catch-up contributions and they would have to be made prior to the end of the plan year.
If you can catch the over-contribution problem before April 15 and before you file your taxes, you can get a corrected W-2 to use.
You should inform your Employer/Plan Administrator as soon as you realize you have made an over-contribution. Your Plan Administrator should provide you with any forms and help that you will need.
Your Employer/Plan Administrator will return the excess money to you as well as any interest that money earned
The excess that you deferred will be treated as income in the year they are made.
If you can fix the error before April 15, 2025 deadline, the correction is much easier.
You’ll need to file your taxes using the updated W-2 and you’ll have to pay taxes on the overcontribution as if it were wages. Your corrected W-2 would show these wages.
if you miss the deadline, you’ll owe those additional taxes and you may have to pay a 10% early withdrawal penalty on the amount.
Then you will owe additional taxes again in the year it was corrected (likely 2025).
If you didn’t catch the over-contribution early enough, you’ll still follow these steps, but you’ll would have to to file an amended tax return
Click here for "Retirement topics - Catch-up contributions"
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