You Changed Jobs and Used Both 401(k) Plans. Did You Contribute Too Much?

How Two Correct Paychecks Can Create One Wrong Total

The employee elective-deferral limit generally applies to you across the plans covered by that limit. It is not a fresh limit every time you start another job.

Suppose your former employer’s payroll allowed $15,000 of 401(k) deferrals. Your new employer does not normally receive that payroll history automatically. If its system permits another $15,000, each employer’s records may look fine even though your combined total is $30,000.

Start With Both Forms W-2

Gather every Form W-2 for the year, including corrected forms. Look at Box 12 and the letter code beside each retirement amount.

For a regular 401(k), Code D generally identifies pretax elective deferrals. Code AA generally identifies designated Roth contributions to a 401(k). Add the amounts that share the annual elective-deferral limit. Do not rely only on the year-end balance shown by an investment website. That balance may include employer contributions, investment gains, losses, rollovers, or older money.

Traditional and Roth 401(k) Contributions Share a Limit

A common misunderstanding is that a traditional 401(k) and Roth 401(k) each receive a separate employee limit. They generally do not.

You may divide your deferrals between pretax and designated Roth contributions, but the combined total generally cannot exceed your applicable employee limit. Roth contributions are taxed when contributed. Pretax deferrals generally reduce current federal taxable wages. That difference does not create two separate limits.

The 2026 401(k) Contribution Limit

For 2026, the basic employee elective-deferral limit for most traditional and safe-harbor 401(k) plans is $24,500.

An employee who is at least age 50 by the end of 2026 may be eligible for an additional $8,000 catch-up contribution, if the plan permits catch-up contributions. A higher $11,250 catch-up limit applies for eligible participants who are ages 60, 61, 62, or 63 at the end of 2026.

401(k) contribution limits for 2026 can change annually, so use the limit for the year in which the wages were deferred.

Catch-Up Contributions May Change the Answer

Age matters. An employee who qualifies for a catch-up contribution may not have an excess even when the combined total is above $24,500.

Beginning in 2026, certain higher-paid participants must make catch-up contributions on a Roth basis. For the 2026 requirement, the rule generally looks to whether your 2025 FICA wages from the employer sponsoring that plan exceeded $150,000. Wages from an unrelated former employer generally are not automatically combined with wages from your new employer for this Roth catch-up test. Special rules can apply to related employers, common paymasters, and certain successor-employer situations.

Do not assume that being over age 50 automatically solves the problem. The plan must permit catch-up contributions, and the correct age, wage, and plan rules must be applied.

Employer Matching Contributions Usually Do Not Create This Problem

Your employer’s match generally does not use the employee elective-deferral limit discussed above. The same is generally true for employer nonelective and profit-sharing contributions.

Those amounts are subject to a separate overall limit. That is a different calculation.

For the job-change problem, begin with the employee deferrals shown under the relevant W-2 codes. Do not add the employer match simply because it appears in your account.

How to Correct Excess 401(k) Contributions

If your total is too high, contact a plan administrator promptly. Tell the administrator that you participated in another employer’s plan and believe you have an excess elective deferral for the year.

Confirm the Amount Before Contacting the Plan

Use W-2s and final pay statements to confirm:

• The amount deferred through each employer
• Whether each amount was pretax or Roth
• Your age at year-end
• Whether a catch-up contribution was allowed
• Whether another plan, such as a 403(b), must be included
• The exact amount over your applicable limit

A plan administrator may ask for a written request and proof of the other plan’s contributions.

Ask One Plan to Distribute the Excess

IRS guidance on excess 401(k) contributions says an employee with excess deferrals should notify a plan and ask for the excess to be paid from a plan that permits the corrective distribution. The distribution generally includes the excess and allocable earnings or losses calculated under the plan rules.

You may have some choice about which plan handles the correction, but the plan documents and administrative deadlines matter.

Do Not Request a Normal Withdrawal

The April 15 Correction Deadline Matters

The plan generally must distribute the excess by April 15 of the year following the year of the deferral, or by an earlier date required under the plan’s procedures.

For a 2026 excess, that generally means distribution by April 15, 2027.

Do not wait until April 14 to call. Plans need time to review the request, calculate earnings, liquidate investments, and issue the payment.

How the Corrective Distribution Is Taxed

Tax reporting depends on what was contributed, when it was returned, and whether the correction was timely.

For a timely correction of a pretax excess, the excess is taxable for the year it was originally deferred. Because it should already be accounted for as taxable income for that year, the returned excess is not taxed again in the year it is paid. Allocable earnings are generally taxable in the year distributed.

Designated Roth deferrals were already included in taxable wages when contributed, so their reporting differs. That is one reason the administrator needs to know whether the excess came from pretax, Roth, or both sources.

The plan generally reports a corrective distribution on Form 1099-R.

A timely corrective distribution generally is not subject to the 10% additional tax on early distributions. Still, do not assume every payment from the plan receives that treatment. The payment must actually qualify as the correction.

Will You Receive a Corrected Form W-2?

Not necessarily. A Form W-2 can correctly show the amount originally deferred through that employer even when your combined deferrals across employers exceeded the annual limit.

The problem may be the combined total, not an error on either employer’s W-2. Ask the employer or tax professional before insisting on Form W-2c.

What If You Miss the Correction Deadline?

Missing the deadline can create an unpleasant result for a pretax excess. The excess generally remains taxable for the year contributed, but it does not create tax basis in the plan. When that money is eventually distributed, it can be taxed again.

A late ordinary withdrawal does not automatically repair the problem. A later distribution may face normal distribution rules, including possible withholding and the 10% additional tax when no exception applies. If April 15 has passed, obtain advice based on the plan, contribution type, and tax year.

A Rollover Does Not Erase the Excess

Moving the old 401(k) into the new plan or an IRA does not retroactively change how much you deferred from wages. A rollover moves retirement money. It does not reset the annual employee contribution limit or turn an excess deferral into an allowed contribution.

Situations That Need a Closer Look

The calculation requires more care when:

• You contributed to both a 401(k) and a 403(b)
• One plan was a SIMPLE 401(k) or SIMPLE IRA
• You had a governmental 457(b) plan
• You also operated a business with a solo 401(k)
• The employers were related or under common control
• You made pretax and designated Roth contributions
• You qualify for an age-based catch-up contribution
• Payroll used the wrong W-2 code

Different plan types do not always combine in the same way.

How to Prevent the Problem After Your Next Job Change

Save the final pay statement from your old job. Before choosing a contribution percentage at the new job, calculate how much room remains under the annual limit.

Give the new payroll department your prior deferral amount if it has a process for tracking it. Review the combined total before the final payrolls of the year.

Frequently Asked Questions

What to Do Next

Add the relevant Box 12 amounts from every Form W-2. Compare the total with your correct annual limit, including any catch-up amount you are allowed to make.

If the total is too high, contact a plan administrator immediately and ask about its excess-deferral procedure. Keep copies of your W-2s, pay statements, written request, confirmation, payment record, and Form 1099-R.

Two payroll systems may each look correct while the combined result is wrong. The goal is not to panic. The goal is to calculate the number, contact the right plan, and act before the deadline.

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