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:

 

Year

IRC § 402(g) Limit

Catch-up contribution limit

2002

$11,000

$1,000

2003

$12,000

$2,000

2004

$13,000

$3,000

2005

$14,000

$4,000

2006

$15,000

$5,000

2007

$15,500

$5,000

2008

$15,500

$5,000

2009

$16,500

$5,500

Potential COLA increase in increments of $500 for tax years beginning 2006 for salary deferrals and catch-up contributions.

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