You do not need to wait for a 1099-R next year that will probably require you to amend your 2019 tax return to report the excess on line 7 of your tax return - it can be entered this way and then ignore the 2019 1099-R with a code P in box 7 when it comes.
There are two methods to do this:
1) Enter a 1099-R with the returned contribution amount (not including earnings) in box 1 & 2a, and a code "P" in box 7. When asked what year 1099-R say 2020.
or 2)
Excess 401(k) deferrals should be reported in:
(There are several screens to click through to get to the right place)
Miscellionious Income ->
Other Income not reported on a W-2 ->
Other wages (yes) ->
House Hold employee (Continue) ->
Sick Pay (Continue) ->
Other earned income (yes) (Includes excess salary deferrals)->
Source of income (other) ->
Any other income - enter the amount of the excess deferral and an explanation.
This will add the returned excess to your 2019 wages on line 1 exactly the same way that the 1099-R would. The only information that is sent to the IRS is the line 1 amount.
[Note: If there were any earning that were returned in 2020 then the earnings will be reported on a separate 2020 1099-R with a code 8 that goes on your 2020 tax return - do not enter the earnings here.]
Both methods will add the returned excess to your 2019 wages on line 1 exactly the same way that the 1099-R would. The only information that is sent to the IRS is the line 1 amount.
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. Include the loss as a negative amount on Schedule 1 (Form 1040), line 21, and identify it as “Loss on Excess Deferral Distribution.”
Enter as:
Miscellionious Income ->
Other reportable Income ->
Any Other Taxable Income (yes) ->
Description (enter "Loss on Excess Deferral Distribution" and amount as a negative number).
I have a similar situation with excess deferral in 2019. Received the excess amount back recently, and following instructions in TT for 1099-R. In the drop down choices, Code P indicates it is for Return of contribution taxable in 2018. Is this the right code to select or do we choose Code 8, which says it is for Return of contribution taxable in 2019?
@dongkun wrote:
I have a similar situation with excess deferral in 2019. Received the excess amount back recently, and following instructions in TT for 1099-R. In the drop down choices, Code P indicates it is for Return of contribution taxable in 2018. Is this the right code to select or do we choose Code 8, which says it is for Return of contribution taxable in 2019?
Read my post above:
"1) Enter a 1099-R with the returned contribution amount (not including earnings) in box 1 & 2a, and a code "P" in box 7. When asked what year 1099-R say 2020."
The "taxable in 2018" applies to a *2019* 1099-R, you will receive a *2020* 1099-R so the 2018 advances by a year to "taxable in 2019". (A code 8 would say that it was a 2020 excess returned in 2020 which is not the case).