how to handle excess 401k deferral with multiple jobs

sotaxes14
sotaxes14 Newcomer
in Filing my taxes

I work multiple jobs and didn't keep track closely enough and ended up contributing like ~2k more than the limit in 2025 for 401k contributions. Since taxes are due in 1 day, I'm assuming it's too late to ask for a distribution so I'm not sure what to do now.

I read through

https://www.irs.gov/retirement-plans/consequences-to-a-participant-who-makes-excess-deferrals-to-a-401k-plan

and it looks like I just need to report the excess as income and that's it? Do I still need to request a distribution or can I ignore it now? also, what if I didn't report this? The IRS has all my W2s so I'm assuming they would catch the overcontribution and say I underpaid my taxes right?
Is there any risk of the irs notifying 1 or all my jobs?

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Answers

  • sotaxes14
    sotaxes14 Newcomer

    does anyone know? I was mainly wondering if I could just report the excess as income and leave the extra in my 401k and not do anything? or is it required that I report the excess as income and take a distribution as well?

  • MatthewD
    MatthewD image
    Hello sotaxes14,

    The IRS required that you take a distribution of the excess 401(k) contribution, which will be reported on a 1099-R.

    Don't ignore it. As there will be penalties for keeping in in your account for years. Only when the 1099-R is reported on your tax return, will the income be reported. And since the 1099-R is reported to the IRS, they will also have a record of the correction.

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