If you over contributed (made excess
deferral contributions) to your 401(k), you should notify your employer or the
plan administrator immediately. Ideally, this notification should be provided
by March 1 of the year following the year the excess deferral occurred. The excess
deferral amount should be returned to you by April 15. Excess deferral amounts
returned to you should include earnings accrued on the excess amount while it
was in your 401(k) plan account. You are required to add the earnings to your
taxable income for the year the excess amount is distributed from your 401(k)
plan account. In addition, if the excess amount was deferred on a pre-tax
basis, your employer must amend your W-2 to show the returned amount as wages.
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