Help for 401k plan sponsors, retirement professionals, small business, employee and 401k rules


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Frequently Asked Question

What happens if I contribute more than the annual allowable limit to my 401k?

Answer: If you exceed the 401k elective deferral limit, you must report the excess as income on your tax return forms for the calendar year the deferral was made and as well as on your tax return for the calendar year when the excess amounts are withdrawn. The only way they can correct the mistake and avoid double taxation is to request that the excess be refunded, plus earnings, by the tax-filing deadline for the year in which the contributions were made, for example, by April 15, 2014, for excess contributions made during calendar 2013. In that case, the excess contribution need only be reported as taxable income for the year the contribution was made.

The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.

 


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