Excess 401k contributions

Lyft
bolla

Go to company page Lyft

bolla
Dec 7, 2020 19 Comments

I contributed 20k for this year pre-tax 401k, due to change of employers. I tried to get back the excess 401k ($500) from fidelity. But they are making it painful. What happens if I don’t claim the excess return?

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TOP 19 Comments
  • Slack
    wjsis

    Go to company page Slack

    wjsis
    I over-contributed by $31, it was super painful to fix but I did it. Required a bunch of phone calls and some pay stubs and confirmation with my employer. I’d highly recommend fixing it because there’s ongoing penalties until it’s fixed. Your 401k provider will send you a check with the excess + calculated interest.

    The penalty is 6% per year (forever until it’s fixed) if I remember it right.
    Dec 12, 2020 4
  • AT&T
    beepbeepbeep

    Go to company page AT&T

    beepbeepbeep
    >What happens if I don’t claim the excess return?

    You will get nailed by the IRS, plus your state tax agency (if you have state income tax).

    As unpleasant as dealing with Fidelity can be, know that going through a tax audit will make Fidelity look like hop scotch.
    Dec 10, 2020 0
  • Lyft
    ubercab

    Go to company page Lyft

    ubercab
    Have you already emailed payroll@lyft to see if they can handle it?
    Dec 7, 2020 4
    • Lyft
      bolla

      Go to company page Lyft

      bolla
      OP
      Yea. Qualtrics is right. It is fidelity that needs to handle it. I wonder what happens if I just leave it like that. Will I be fined?
      Dec 7, 2020
    • Afaik, next year when you file taxes, you have pay tax on the overcontribution (since you didn't this year) + 10% penalty.
      Dec 7, 2020
  • GE
    n64gtfo

    Go to company page GE

    n64gtfo
    I assume you just fix it whole filing your taxes?
    Dec 7, 2020 3
  • How can we avoid excess? Fidelity only allows us to enter percentage.
    Mar 5, 2021 1