There are two issues here.
1) The excess is still taxable income to you even if it cannot be returned. That means that a 2018 excess must be reported as 2018 wages on line 1 on the 1040 form. Since it cannot be returned in this situation it can remain in the account but you will be taxed again on the same money when eventually withdrawn. This is explained in IRS Pub 525 page 10.
https://www.irs.gov/pub/irs-pdf/p525.pdf
Excess 401(k) deferrals should be reported in:
(There are several screens to click through to get to the right place)
Miscellionious Income ->
Other Income not reported on a W-2 ->
Other wages (yes) ->
House Hold employee (Continue) ->
Sick Pay (Continue) ->
Other earned income (yes) (Includes excess salary deferrals)->
Source of income (other) ->
Any other income - enter the amount of the excess deferral and an explanation.
This will add the returned excess to your 2018 wages on line 1 .
2) There is currently an TurboTax bug that is prevent e-file when the W-2 has excess contribution.
The bug is scheduled to be fixed on the 4/5/19 update, so try again on 5/6/19 after the update.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
