If you work for the same employer during 2016, then the employer should
correct the error to avoid the plan from being disqualified. Click here for more information from
the IRS.
Per the IRS website:
Employees whose elective deferrals exceed the
limit must report the excess as income on their tax returns for the calendar
year the deferral was made and on their tax returns for the calendar year when
the excess amounts are withdrawn.
The only way to correct the mistake, avoid
double taxation and potential plan disqualification is to have the excess
amount, plus earnings, refunded to the employee by the tax-filing deadline for
the year.
