It is too late to remove it now so it just stays in the account and will be taxed when you finally withdraw it probably after you retire.
However, the excess is also taxable as income on your 2020 tax return since the contributions reduced the taxable wages so you must add that amount of the excess back in. If that sounds like double taxation, it is and that is the penalty for not timely removing the excess plus earnings.
On your 2020 tax return (or amended tax return if you already filed), enter it this way.
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.
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
**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.**
