I over-contributed to a 401k in 2020 due to front-loading my contributions then changing jobs to a place that auto-enrolled me in 401k contributions.
Delayed filing taxes because I’m owed refunds and didn’t want to deal with this issue. The over-contribution was only a few hundred dollars (assume $100), producing only a few dollars of interest in 2020 (assume $5).
I know I’ll have to take a distribution and pay an early distribution penalty. My question is: is it just the $105 that will need to be distributed and will the penalty be computed based on that for my 2020 taxes? For 2021, can I just take a larger-than-necessary over-contribution in lieu of calculating the exact amount required. Finally, my most pressing question: does this corrupt the entire 401k and am I safe to make contributions to it now?
Thank you in advance!