@ck128 wrote:
And if Fidelity does do the refund, then there won't be a double tax scenario because there is no extra money when distributing the 401K in the future, right?
And only if Fidelity will not refund (after 4/15 or after 7/15), then this is a double tax situation, correct?
If the excess plus any earnings are not returned by the date specified by the IRS then it will be a taxable distribution. In addition, if you are under age 59 1/2 it will also be subject to a 10% early distribution penalty. It would make little sense to remove it after the date and not just leave it in the plan to continue to grow.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
