Excess deferral

Definition

Salary deferral contributions, contributions are limited to the lesser of the IRC § 402(g) limit or 100% of compensation. Salary deferral contributions in excess of this limit are excess deferral contributions.

The 402(g) limits are as follows:

Referring Cite

IRC § 402(g)(3)

Additional Helpful Information

• • Excess deferral contributions  should be corrected by April 15 following the close of the taxable year. The  distribution should include any income allocable to the excess
  • Failure to remove the excess deferral by the deadline could result in double-taxation to the employee

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