I am employed by a state university, who contributes directly to a 403b as part of my benefits package. I am also eligible to contribute to a a voluntary 403b through Fidelity, which I do to the maximum allowed by the IRS and I monitor this regularly. A few weeks ago, I was notified by my employer that they overcontributed to the 403b, but then when I looked at the numbers, the combination of both the employer-contributed and voluntary 403b was under the annual cap allowed by the IRS ($69,000 in 2024). The rep at Fidelity explained that after digging into the details, they found that although the employer contributions did not exceed the annual limit, they contributed more than what they should have contributed compared to my peers - something they called the "non-discrimination rule." The Fidelity rep I spoke with said this is uncommon.
Long story short, I will be receiving a check this over-contribution, although the total 403b contribution for 2024 falls below the $69,000 limit set by the IRS. This will come to me as income, which I assume I will report on my 2025 taxes, since it will be disbursed this year. What I am not sure about (and was the Fidelity rep) is whether I need to report anything about this on my 2024 taxes. Thanks for any help you can offer.
