Are excess contributions under the recharacterization method determined the same way as under corrective distributions?

Excess contributions under the recharacterization method are indeed determined similarly to how they are assessed under corrective distributions, which is why the answer is considered true. In both cases, the primary focus is on the amount that exceeds contribution limits established by the IRS for 401(k) plans.

When a participant contributes more than the allowable limit, the excess must be resolved to maintain compliance with the Internal Revenue Code. Under the recharacterization method, the excess contributions are reallocated as if they were made to a different type of account, while corrective distributions involve returning the excess contributions to the participant. Both methods ultimately aim to handle excess contributions effectively and ensure that the plan stays within regulatory guidelines.

Therefore, as these methods address excess contributions through similar calculations and principles, the assertion that they are determined the same way is valid.