Regional Vice President of Sales The Retirement Plan Company
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Wrong Correction Method for Excess 401(k) Deferrals During 2020
BenefitsLink Message Boards Apr. 6, 2021 "The company is paid bi-weekly and had 27 pay periods in 2020 instead of the normal 26. One of their payroll people miscalculated their own 401(k) contribution, intending to contribute the maximum $19,500 over 26 pay checks, but instead overcontributed by $750 because of the extra paycheck. But instead of having the excess paid to them out of the plan, the payroll person took it upon themselves to adjust their own W-2 and adjust their own paycheck so that they could get the money back from the employer instead of taking it out of the plan. No 1099 issued, no earnings on the excess. It's a large company, so no one is likely to notice, this would seem to be a problem. How big a problem is this, if it is?" |
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