I'm in the same situation as the original poster, and I know I will not receive the excess back in time before the deadline, perhaps at all given the restrictions of my 401k since this withdrawal is not one of allowed types of early withdrawals.
According to the official IRS website on this issue (https://www.irs.gov/retirement-plans/consequences-to-a-participant-who-makes-excess-deferrals-to-a-4... ) it talks about the taxed amount if corrective distribution is made before 4/15 along with how to handle earnings on the gap period -- but not if corrective distribution is not made in time (after 4/15).
So...if I wait until 59.5 (either forced to due to plan terms or by choice), am I going to have to pay significantly more tax on the earnings over that time period since the gap period, is like, 15 years in that case, or is "gap tax" on earnings still limited to earnings during the calendar year (which, in this case, was actually a loss over the calendar year)?
I don't want some really massive tax 15 years from now. So if someone can clarify specifically -- for the case where corrective distribution of the excess is not possible -- 1) when do I pay tax; and 2) what is the the amount paid each time I have to pay taxes? For ease of example, let's say the excess was $10,000. Please advise!
@DanaB27
