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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The penalty is 6% per year (forever until it’s fixed) if I remember it right.
based on my reading, you're effectively just taxed on the excessive amount for that tax year on your marginal tax rate.
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.