I had over contribution on my 401K at 2020 [It was not on my side but company it happened as company did not meet salary guide for contribution to allow me for full contribution that was allowed by IRS]. In 2021, I changed my employer and rolled over all my 401K to new one [Fidelity]. However, I did receive corrected 1099-R for 2020 for over contribution in 2021 [Reason I received late was company mistake as I explained above] and older company also told me I need to just file it and not take more actions [Another mistake as I noticed later that I need to withdraw it]. The first 1099-R that I did receive was corrected one for 2020, Box 7 shows code 8 and Taxable amount was 9200$ in Both Box 1 and 2a. I did file it as it is on my 2021 tax return.
As explained, I noticed I need to withdraw money, then I contacted Fidelity [As I did transfer all older 401K that over contribution happened to it]. After long discussions, Fidelity processed it in 2022 and sent me a check that was ~7200$ and issued new 1099-R for 2022. New 1099-R box 7 code is "E" and Box 1 and Box 2a are 7950$ with Federal and state tax withheld [The reason I have got less in my check that Box 1]. As you can see, I had file more income in 2021 than what actually I got paid in 2022. Now I taxed double and wondering How I can claim credit and avoid double taxation in my 2022 return.
I appreciate any advice and help!
