These excess contributions from the past are kept in a running tab called a credit balance.

First, they make excess contributions - tax free - into the plan.

And employees would have to pay income tax on such excess contributions.

The excess contributions cannot be spent in the primary.

No credits would be allowed for any excess contributions to the purchase price.

You withdraw the interest or other income earned on the excess contribution.

Report it on your return for the year in which the excess contribution was made.

You did not take a deduction for the excess contribution being withdrawn.

The earnings are considered to have been earned and received in the year the excess contribution was made.

As a result, he was fined $7,179, the amount of his excess contributions.