In a case like this, the distribution of the excess from the Roth 401(k) is treated just like any other distribution from the Roth 401(k) except that it is taxable because an excess contribution to a Roth 401(k) does not add to contribution basis. Further, the first amounts distributed from the Roth 401(k) containing the excess contribution consist of the excess and it's attributable gains until the entire excess and attributable gains have been distributed. Since the distribution of the excess and attributable earnings is taxable, it will be subject to a 10% early-distribution penalty if the distribution occurs before you reach age 59½. Note that you are generally not permitted to take this distribution until you have either reached age 59½ or you separate from service with the company providing the plan that contains the excess contribution.
