@kberry7211 wrote:
March 1st of this year, so it has already passed.
So i overcontributed in 2021, cant get a a refund on the excess deferral, and am not sure what to do about it on my 2021 tax return.
Thanks
The tax law says it must be refunded before April 15, of the year following the excess, not March 1.
However, for a job switch involving two employers then neither employer is required to return the excess but most will.
If they do not then the excess can remain in the plan but it still taxable income to you in 2021 and will be taxed again when you finally remove it (after retirement). That double tax is the penalty for not removing it. In the mean time the excess will continue to grow in the account so that might actually turn out to be an advantage.
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
Excess 401(k) deferrals should be reported in:
(There are several screens to click through to get to the right place)
Miscellionious Income ->
Other Income not reported on a W-2 ->
Other wages (yes) ->
House Hold employee (Continue) ->
Sick Pay (Continue) ->
Other earned income (yes) (Includes excess salary deferrals)->
Source of income (other) ->
Any other income - enter the amount of the excess deferral and an explanation.
This will add the excess to your 2021 wages on line 1 of the 1040 form.
**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.**
