What does Fidelity have to do with it - a 401(k) is an employer plan. The contributions would be reported in box 12 on your W-2 (or W-2's if you have two). Is that is how it was shown?
However, it is a 401(k) then April 15, 2021 was the last day that the excess could be returned plus any earnings attributed to the excess. After April 14, 2021 the excess (and earnings) must remain in the 401(k), but since you did not pay any tax on that income that was in box 12 (code D) in your W-2, you must pay that tax now in your 2020 tax return (or amended 2020 tax return).
That means, when you finally take distributions from the 401(k) that money will be taxed a 2nd time (just like other distributions). That double tax is the penalty for not removing prior to the April 15 date.
This is explained in IRS pub 525.
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
Report it this way:
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 returned excess to your 2020 wages on line 1.
**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.**
