1. As the money has been refunded to you, it is your money and you can cash the check and use the money as you want.
2. Look at your form W-2 and the amount reported in box 12 with code D. If the amount is $17,000, then all is fine.
If the amount is $23,000, then you will receive a 2025 form 1099-R (in beginning of 2026) and you'll report the refund to be taxed in 2025. See this IRS document.
3. For the contribution to an IRA, you have until April 15, 2025 to contribute for tax year 2024.
To help you decide, here is my advice:
You are covered by a retirement plan at work. So depending on your filing status and your MAGI, the deductibility of your contribution to a Traditional IRA may reduced or eliminated.
You can check the deductibility by reading this IRS document.
If your Traditional IRA is not deductible, then you may check whether you can contribute to a Roth IRA by reading this IRS document.
[Edited 03/05/25 | 1:51 PM PST]
@Leoesp
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