Excess 401k contribution

May 10, 2021 13 Comments

I changed my job last year. I updated my current payroll system with previous contribution amount.

However, I received an unexpected paycheck a month after I left my previous job for a small amount. It’s associated 401k contribution (less than $100) put me over the limit. I didn’t realize it until it was too late.

Apparently, even though the tax return deadline was moved, the excess contribution correction deadline remained 4/15 (unlike last year). So, currently I still have the excess money in my 401k. Fidelity said that they can’t remove the money after the deadline. I know that I will be double taxed on the excess. But, I thought that there will also be a penalty till the excess is removed.

Anyone else in this situation?

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