Went over $58k total 401k limit, what now?

For 2021, the total amount one could put into 401k with company match and everything included was $58k. However, it appears my wife was allowed to put in $59.2k by her employer. She does a bunch of post-tax 401k that we roll over to Roth and I thought they would limit at end of year when she reached $58k limit but it appears they did not. Wife has ticket opened with HR (waiting for over a week now) to see what they say and how to avoid in the future.

To be clear, for pre-tax amounts, she was stopped at $19.5k so that is not the issue. The issue is that with pre-tax, company match and her after tax contributions included, she went over the $58k limit.

The main problem is that 3-4 times a year she rolls over the post-tax amount to an external Roth IRA. This was done before we realized the issue so basically the post-tax money from 2021 is already gone out of the account (although she has 2022 money in there). The total amount is not listed anywhere on the W2 and we only discovered it by searching through her 401k site and showing all transactions for 2021 to get the total.

Every website I find gives steps when the pre-tax amount goes over but not details when only the total amount was over the limit. Any idea what we should do? Part of me says be quiet and hope nobody notices but not sure if that is the best answer.

Also, I assume this was an error on the part of her company’s HR team or 401k provider since everything was through that one company (no job changes).

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You discovered this on your own, it was not discovered by her employer, was not discovered by her 401k administrator, and you don’t have tax form documents that were issued to you (also sent to the IRS) that list this total going over the limit in any way in which the IRS can find out what happened?

Correct on all counts. I assume you are thinking be quiet and just watch this year to not go over.

When her HR finally reviews the ticket, I assume we should work with them to get system fixed so this doesn’t happen again. You agree or don’t even do that? It would be nice to have them do their job and stop at the limit.

If you didn’t get any tax benefit by going over, and the only real benefit to you is that your 401(k)/Roth IRA balance is a little higher than it should be with after tax deposits, yeah, I think since you can’t really find any guidance, you should just pretend you never discovered the issue.

If you still want to pursue it, skip HR and talk to the plan administrator about getting a refund of excess contributions and don’t worry about involving the IRS until the plan sends you a 1099-R with the refund amount on it (next year’s taxes at this point).

I don’t know about this particular HR department, but I would be surprised if it has any knowledge or ability of how to deal with post tax contributions to an account in which the contributions don’t stay in the account all year. If they do and they just forgot to check a box somewhere, great. Feel them out when you talk with them and if they seem competent, see if they can keep it from happening in the future automatically. But if they look like a deer in headlights when you start talking about the rollover of the post tax amount to a Roth, just assume they can’t fix this and it will be on you to make sure you don’t over contribute in the future.


You can unwind all this with enough paperwork, or you can hope they don’t notice. Next time be a bit more careful all the numbers add up before rolling the money out of the plan where it’s harder to fix errors.


I would not assume that the IRS won’t find out about this and audit her.


Over $1,200 in excess post-tax contributions? What would the IRS stand to gain from that?


Thanks for the info. Yeah, it’s not like we are avoiding current taxes so IRS doesn’t have much to gain now but she is technically over the IRS limit for 2021.

I think I’ll monitor more closely from now on now that I know how to check the number (even figuring that part out was harder than it should be). I’m curious to see what her HR says assuming they ever respond. I think my comment is true: “You have to be nice to HR, English majors needs to work too”. We usually know about things than they do…

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Isnt the worst-case that there’s a penalty on the excess contribution? And he can under-contribute in 2022 by $1200 to remedy it so the penalty is only charged for 2021?

I don’t think the IRA excess contribution rules apply to 401ks, but it’s been a while since I looked at this stuff. Normally you just have to take the money and its earnings out, and pay taxes on any earnings they made while in the plan.

As Xerty said, the tax avoided on the amount would be due. In this case its not alot sure.

But you know an audit from the IRS does not usually really mean a huge investment of time for the IRS. We’re not talking a team of guys in suits coming to your house and pouring over all your numbers… They mostly just send generic form letters for stuff like this. And I presume those are mostly automated and computerized.

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For clarification purposes, I don’t consider a computer finding a mistake and sending a letter saying, “we looked over your return and you owe us $324 in taxes and $118 in fees and penalties,” an audit. Based off @robstrash’s answer to my question, there would be no way for a computer to even do that. So it would actually have to be an audit done by an agent and I don’t see how the events and dollar amounts in this case could trigger that, nor is there anything for him to worry about if it were triggered.

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Update from HR:
It turns out the payment they make in March is actually for the previous tax year. So the March 2021 payment was actually for tax year 2020. Therefore, that amount is not included in tax year 2021. The amount they paid in March 2022 counts for tax year 2021. If you include that amount, she exactly hit $58k so it’s working correctly, it’s just confusing as to which year the money applies.

Now I have to figure out if we missed out on part of the company match since they lowered it this year since she was at the $58k limit. That’s a task for another day though.


Congrats on not being over. The only way that I found to get the full company match while also contributing the full post-tax amount is to make no post --tax contributions until you’ve maxed out the company match. There may be other, more elegant ways, but we’ve done my wife’s post-tax contribution in the last couple of weeks of December.


What makes this more complicated is that about 10 years ago they stopped their pension so for 5 years they were supposed to get bonus amounts in their 401k match. However, it appears that she’s still getting some of this bonus amount. I’ve never been able to figure out exactly how this company match portion works but sounds like I’ll need to figure it out to ensure we don’t leave any money on the table.


Those letters are technically an ‘audit’ and its how most of them are done by the IRS.

Audits are almost 80% by mail and just 20% in person.

I understand what you’re saying and I don’t necessarily disagree, but I think it’s important to be clear there is a very big difference. And in this case (had what rob thought had happened actually happened), he wouldn’t have been in danger of one of the 80% of audits because there was no form sent to the IRS that would have allowed them to connect the dots. He would have needed to be one of the 20% and they wouldn’t have an agent go through his records with a fine tooth comb over a 401(k) post tax contribution.

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I disagree. My point was/is that I don’t think its safe to assume the IRS won’t find out about something like this.

Essentially all those “audits” you refer to (the 80% I don’t like to call audits) are conducted because the IRS’s computer found that what you put on your return didn’t match what was on a form sent to them. How is it not safe to assume they can’t do an automated “audit” when their inputs don’t allow for it?

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