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Retirement tax questions
If the distribution of the excess is made now, it it must be done by make a regular distribution. As indicated by macuser_22, not only will the excess contribution amount be reportable on your 2019 tax return as income, the distribution will also be subject to ordinary income tax and, if you are under age 59½ and no other penalty exception applies, it will also be subject to an early-distribution penalty. It would be far better to just leave the excess in the 401(k).
July 10, 2020
9:24 AM