excess deferral are included in the employee's gross income - irc sec 402(g)(1)(A), reg 1.402(g)-1(d)(1). they will be taxed again on distribution unless distributed to the employee in a corrective (nontaxable) during the tax year made or by 4/15 of the following year irc sec 402(g)(2)(C) reg 1.402(g)(1)(e)(8)
