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Get your taxes done using TurboTax
Yes, you don't have to add the excess contribution to your Roth 401(k) to your 2022 wages when you receive the excess amount by April 15th because they were after-tax funds.
You can ignore the 2023 Form 1099-R with codes B and P for the return of the excess deferral to the Roth 401(k). But the 2023 Form 1099-R with code 8 for the earnings will have to be reported on your 2023 tax return.
Please be aware, if you do not take out the excess amount by April 15th, then you are taxed twice on the excess deferral left in the plan. This happens once when you contribute it and again when you receive it as a distribution. You can't include the excess amount in the cost of the contract even though you included it in your income.
Please see Pub 525 for additional information.
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