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Contribution limits and excess 457(b) contribution

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  • Contribution limits and excess 457(b) contribution

    Hi forum folks!

    I was digging through my year end statements.
    I finished fellowship and started a new job in 2022 and made the following contributions:
    Fellowship 457B (gov)
    - employee = $784.98
    - employer = $2,482.59
    Attending 457B (non-gov)
    - employee = $17,250.66
    Total 2022 (employee + employer) = $20,518.23

    1. Is there a difference in limit in contributions when comparing employee and employer? From my understanding, the total limit is 20,500 total for 2022, regardless of where it came from.
    2. If so, do I just call fidelity and have them remove the excess $18.23+ earmings and give me a check?

    I could have sworn I did my math correct when I set contributions at the new job to max it out, but I was a wee bit off.

    Thanks for your help

  • #2
    1. You are correct, the 457b contribution limit is unique. While the limit is the same amount, but separate from the employee deferral limit. It is a total employee + employer contribution limit.
    2. If you wish to remove the excess contributions and earnings, calling Fidelity is the correct step
    While you must include a traditional excess contribution as "other income". There is no requirement that you actually remove the excess contribution and earnings.

    It is just that if you do not remove the excess contribhition it will be taxed on withdrawal. Since you will effectively be making an after-tax contribution. It will be subject to double taxation.

    Personally for an excess contribution of $18.23, I would leave it alone.


    • #3
      Thanks for your help!