401kCorrecting Excess 401(k) Contributions
Contributing more than the annual limit is more common than you'd think — especially after switching jobs mid-year — and fixing it quickly matters for your taxes.
Reviewed January 2026 against current IRS guidance.
How this usually happens
The most common cause is switching employers mid-year: the elective deferral limit applies to you as an individual across every 401(k) you contribute to in a calendar year, but each employer's payroll system only tracks contributions made to its own plan. If you max out contributions at one job and then contribute more at a new job in the same year, neither employer's system will necessarily catch the combined overage — it's on you to track it.
The correction deadline
Excess elective deferrals generally must be withdrawn, along with any earnings attributable to the excess, by April 15 of the year following the year the excess contribution was made, to avoid the amount being taxed twice.
If corrected by that deadline, the excess amount is taxable in the year it was contributed (not the year it's withdrawn), and the earnings on the excess are taxable in the year they're distributed.
What happens if you miss the deadline
If the excess isn't withdrawn in time, it's taxed once in the year it was contributed, and then taxed again when it's eventually distributed from the plan — meaning the same dollars get taxed twice. This is the specific outcome the April 15 correction deadline exists to help you avoid, which is why catching an excess contribution early in the year matters.
How to fix it
- Contact your plan administrator (or administrators, if the excess spans two employers) as soon as you realize the overage.
- Request a "corrective distribution" of the excess amount plus allocable earnings.
- Make sure the correction happens before the April 15 deadline for the year following the contribution.
Because this involves coordinating with a plan administrator and correctly identifying which portion of your contributions was in excess, it's worth looping in a tax professional if the amount is significant or the timing is close to the deadline.