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A paricipant in a 401(k) plan went over the 402g limit for 2007. We/he didn't discover the "excess" until now. Since it is past the 4/15 deadline to return/refund what is the fix? Can we still refund or does the money have to stay in the plan?

Posted
A paricipant in a 401(k) plan went over the 402g limit for 2007. We/he didn't discover the "excess" until now. Since it is past the 4/15 deadline to return/refund what is the fix? Can we still refund or does the money have to stay in the plan?

There is no fix if his total contributions to the plans of two or more unrelated employers exceed the 402g limit. The excess will be taxed to him in 2007 and again when he receives it.

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