@fanfare - This return of excess contribution came from a 401(k) account that upon retirement was rolled over into a Traditional IRA. However, it appears the excess was generated in the 401(k) due to a mix of employee and employer contributions. Nonetheless, the letter we received said it was my wife’s excess contribution of $2900.98 and $50.19 earnings for a total of $2,951.17 that was just removed. The excess was in 2022. The return just a couple of weeks ago.
It would seem that the entire amount has to be taxable - as are funds removed from 401(k) or IRA that are both tax sheltered until removal.
That is why the Box 1 and 2a are causing some confusion. If I only enter the $50.19 in box 2a and that is all that is taxed, what about the original $2900.98 which hasn’t been taxed?
