Dana contributes $2,000 too much to a § 401(k) plan which is not returned within 2 1/2 months after the close of the tax year. The employer will have to pay a tax of $200.

Question

Quizplus · Accepted Answer

The employer is responsible for withholding and remitting taxes on excess contributions to a § 401(k) plan. The tax is 10% of the excess contribution, which in this case is $200.

Dana Contributes $2,000 Too Much to a § 401(k) Plan