403b Bloat - Too much of a good thing
I recently received a bonus payment as part of a productivity plan (basically, we busted our butts and are getting reimbursed for income that was ours right along, but that's another story). As a result, my normal 10.43% withhold for our TIAA-CREF 403b contribution was applied to that unexpected payment, as it is to all my paychecks. That amount would have been right if no bonus was paid.
Problem is, coming this late in the year, it put me over the contribution limit of $44,000 for the year. I immediately cancelled payroll deduction contributions through the end of the year but despite that will probably be about $2500 over.
I am checking into it at work but they appear befuddled. TIAA will call me back tomorrow. So, what happens? Can TIAA-CREF refund my employer who then passes it along to me less taxes, etc.? Will I have to pay an IRS penalty, or can I squirm out of it before 12/31?
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.
As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.