dmertz
Level 15

Retirement tax questions

Gains included with a distribution of an excess contribution from a Roth 401(k) are taxable on the tax return for the year in which the distribution is made.  It's up to you as to whether you want to have any taxes withheld.  If the gain is relatively small or there is a loss, simplest would be to decline withholding, particularly if you typically get a refund from filing your tax returns.