newemployee401k

All - Thank you for your responses. Regarding the question of why I didn't notice the deductions... Yes I should have been more diligent. But essentially I was relocated to the USA to work here on a work visa. I started working in May but my first pay check was in July (covering May-Jul work) after social security was issued (in Jun) and HR processed that. I also made my 401k contribution limit in by the end Jul deadline (applicable retrospectively) and I was told that it will take a few months to activate. Followed by a screw up in my medical deductions which when I highlighted I wad told that it was due to a migration to "workday HR software" and there are other issues and everything will be sorted out by Oct/Nov. But the 401k never got sorted out. HR confirmed that I had made by election properly and the problem was on the backend side. Otherwise they would not offer the match or the 2% of base pay.

Thank you very much. I have also updated the post to clarify that no money was held from my paycheck and hence no contribution was made to my 401k - I got my entire base salary in 2019 minus the health insurance premiums and HSA contributions.

Hi All - Looking forward to your expert opinion on my situation. Situation - I started working in May 2019. First job. Huge multinational firm. I elected to contribute 20% of my pre-tax income into my 401k to hit the ~19k max employee contribution limit. My employer matches upto 6% for the first 100k of my salary. - In Nov 2019, I noticed that 401k deductions hadn't happened properly at all in any payroll - meaning 20% was not taken from my paycheck (bi-weekly) and hence no deposit to 401k and I was paid my full base salary excl medical premium and HSA deductions. I escalated to HR, and they took 3 months to investigate and got back to me in Feb 2020 after constant follow up. Meanwhile 2019 tax year was over and I got my W2 with no 401k deductions. Solution from HR HR told me in Feb 2020 that - The underlying root cause was identified. The mistake was not on my side - They will provide the full 6% match into my 401k as if deductions had happened properly - However they cannot deduct any 2019 employee contributions for me retrospectively. Instead they would pay me a penalty of 2% of my base pay as compensation (into my normal paycheck and not 401k) in 2020 which they said is "the standard IRS guidance" to fix the issue - My 2020 deductions would happen as normal My problem I dont want the 2% fee to be paid to me (which will also be taxed). Instead I want them to fix the issue by deducting from my paycheck and depositing into my 401k what should have been done properly in 2019. I am willing to cover that from my 2020 salary (for both 2019 and 2020 deductions) or willing to transfer the amount back to the employer (I had given HR these options as well). Meanwhile I have filed a tax filing extension till Oct 2020 to get some runway to deal with this problem Advice needed - Is my HR statement on the 2% penalty the standard IRS guidance? Or is there a way to get them to put in the proper amount into my 401k for 2019 contributions. - If there are rules to get HR to do the right thing, any idea of the impact on my tax filing will be welcome. The company provides for me a tax attorny for the first year of filing and I will be discussing this with them anyway but any insight will be appreciated.