Tax refunds due to excess federal income tax withholdings represent an opportunity lost by employees to contribute that amount to their 401ks through salary deferrals. Once form 1040 is accepted, and IRS acknowledges and issues a tax refund, they can provide an opportunity back to the employees to contribute the refund amount back to their 401k plans since they missed out on using that amount towards their 401k contributions due to excess tax withholding.