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

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If an employee contributes more than the allowed limit to a § 401(k) plan and this excess amount is not corrected within 2 1/2 months after the end of the tax year, the employer will have to pay a 10% excise tax on the excess contribution. In this case, $200 would be the amount of the excise tax on the $2,000 excess contribution.

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