401K Excess Contributions

Forum|Forum|4 years ago
January 26, 2022
1 reply
6 views

I have just realized that I made around $700 excess contribution to my 401K between 2 employers. I checked with both the employers and they are reluctant to take the excess contributions. What options do I have here?

Appreciate some help..

Not A Product Question

macuser_22

Alumni - Champ

If you had more than one employer then neither are obligated to return it because neither made an error. Your only option it to just leave it in the account and pay the 2021 tax on it (adumbrating that it was a 2021 contribution). When you finally retire and withdraw the money, it will be taxed again - that is the penalty for having an excess.

(There are several screens to click through to get to the right place)

Miscellionious Income ->
Other Income not reported on a W-2 ->
Other wages (yes) ->
House Hold employee (Continue) ->
Sick Pay (Continue) ->
Other earned income (yes) (Includes excess salary deferrals)->
Source of income (other) ->
Any other income - enter the amount of the excess deferral and an explanation.

This will add the returned excess to your 2021 wages on line 1 of the 1040.

The only information that is sent to the IRS is the line 1 amount.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**