Overpaid 401k in 2015 and received refund excess deferral of +$0.35 in 2016. Turbotax says i may have to amend 2015 return. Why and what do i amend?

[Trapp]

I overpaid 401k in 2015 by $99.35. Refund excess deferral check of $99.70 (+$0.35) was sent to me in 2016. Turbotax says i may have to amend 2015 return. Why and what do i amend?

[RichardG · Accepted solution]

The excess deferral distribution includes income earned by your excess contribution.  Technically, you are required to report that income (35 cents) on an amended 2015 return.  Given the amount of income, it's very unlikely it will raise your 2015 taxes.  I would not bother amending my 2015 return under the circumstances.

[dmertz]

Actually, the entire $99.70 is includible in income since the $99.35 would have been excluded from the 2015 W-2's box 1 amount.  I would expect the code P 2016 Form 1099-R to have the entire $99.70 in box 2a as well as in box 1.  A $100 (rounded) change in income necessitates filing an amended tax return unless this $99.70 was previously reported and the $100 (rounded) was included on Form 1040 or 1040A line 7.