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I have had two employers in 2019. Through both employers, I made around $18K pre-tax 401K contribution combined in 2019 (which is less than $19K limit). However, through employer match and after-tax contribution, I contributed $39K to my 401K. So the total contribution in 2019 is $57K which is higher than the $56K limit.

What should I do? Since my pre-tax contribution is still under the limit, do I need to take any action?

  • Your employer limit does not count towards any limits. How much did you contribute after-tax? – D Stanley Nov 4 at 13:07
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    @DStanley: No, the employer contribution does fall under the $56k limit for all contributions to 401k. – user102008 Nov 4 at 17:21
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You definitely need to take action. The sooner the better, but certainly before March, 2020 as your administrator probably has a deadline around then.

Contact one of your employers and explain the situation. They will return your $1000 excess contribution (and possibly some earnings) to you--make sure this happens before April 15. You may need to provide written documentation as well. The earnings, if any, will need to be reported as income. The employer will need to adjust your W2 and send you a 1099-R. You shouldn't have to pay any penalties if you do it in a timely fashion.

If you don't act, the IRS will send you a computer-generated notice that you contributed above the limit. I'm not sure what else they will do to you, but it won't be anything good.

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