hello
I had two jobs in 2022 and 401K contribution from both employers.
There is $11 excess salary deferrals.
Contacted the Agency for a return of $11.
My question : How do I report that $11 as my normal income in 2022 tax?
As i see in one post (please see below)
Best answer
MinhT1
Employee Tax Expert
a week ago
You should report the excess contribution in 2022. This excess will be added to Wages to be taxed. The reason is that the excess had been wrongly excluded from taxation on your form W-2 in 2022. This excess will not be taxed again in 2023. Only the gain realized on the excess (if any) will be taxed in 2023.
This is how you report the excess contribution.
Report excess salary deferrals (excess 401k contributions) returned to you after the end of the tax year but by April 15th of the following tax year on your 1040. Do not create your own 1099-R for this situation.
Pages 10 and 11 of IRS Pub 525 under Excess deferrals (the IRS term for 401K contribution is deferral) tells us:
If your deferrals exceed the limit, you must notify your plan by the date required by the plan. If the plan permits, the excess amount will be distributed to you. If you participate in more than one plan, you can have the excess paid out of any of the plans that permit these distributions. You must notify each plan by the date required by that plan of the amount to be paid from that particular plan. The plan must then pay you the amount of the excess, along with any income earned on that amount, by April 15 of the following year. You must include the excess deferral in your income for the year of the deferral. File Form 1040 or 1040-SR to add the excess deferral amount to your wages on line 1a.
What you earned will be covered by a 1099-R for the following tax year and will be entered then as a normal 1099-R.
Below is how to do this in TurboTax:
- Click on Federal in the left-hand column, then on Wages & Income
- Continue and locate the section Less Common Income
- Select Miscellaneous Income and click Start
- Select Other income not already reported on a Form W-2 or Form 1099 and click on Start
- Answer the question "Did you receive any other wages? Yes
- Click through the questions till you get to Any Other Earned Income
- Answer Yes to Did you earn any other wages?
- Indicate Other as Source of Other Earned Income and click Continue
- For the description enter "2022 Excess 401K Deferrals" and click on Done
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Followed the steps.
i am seeing those $11 in line 1h.
But as in the IRS information (see pasted from Turbo tax post) that $11 should go to line 1a. I am pasting the last line below:
"File Form 1040 or 1040-SR to add the excess deferral amount to your wages on line 1a."
I will highly appreciate if you please clarify the confusion.
Thank you
