What is an excess deferral, and how do I fix one?

An excess deferral happens when your own 401(k) contributions exceed the annual limit — $23,500 in 2025 ($31,000 with the 50+ catch-up). It usually occurs when you change jobs mid-year and both employers withhold contributions without knowing about the other. If you don't fix it, you get taxed twice: once in the year you contributed and again when you eventually withdraw it. The remedy is to notify your plan administrator and request a 'corrective distribution' of the excess plus any earnings on it, ideally before April 15 of the year after the over-contribution. Acting before that deadline gets the excess back into your income in the right year and avoids double taxation; missing it makes things much worse. Review both W-2s in December, and if the boxes add up past the limit, contact your plan right away to start the correction.