Last year I left excess 401k contributions in the account. Do I need to do anything this year?

Question

In tax year 2018 I over-contributed to my 401k due to job change. Although I discovered the problem before the tax return filing deadline, the bank refused to return the excess funds.

I've consulted a CPA and we filed the tax return.

The next year I made sure to contribute less to my 401k, so that the 2019 contributions + excess 2018 contributions are within limits. (Maybe it was wrong to do...)

The question is: What do I need to do for tax return for 2019 to "close" the issue? Do I need to put my last year's excess anywhere?

Unlike excess HSA contributions, I do not see any special effect of the 401k excess in the tax return forms.

P.S. Did I just make a mistake to limit my 2019 401k contributions?

Answer 1

I'm not an expert in this area, but my understanding is that over contributing to your 401k in 2018 is a serious mistake that needs to be fixed ASAP. It is very odd that the bank (though 401k custodians are not usually banks) would not fix immediately.

You can't undo this mistake by under contributing in 2019. The under contribution in 2019 isn't a mistake in itself, but you just missed out on a maximum contribution for 2019.