Yes, you will select code P. Code P will say in the drop-down menu "Return of contribution taxable in 2022" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2023. Make sure you select it is a 2024 Form 1099-R in the follow-up question. The excess deferral will show up on line 1h of Form 1040.
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.
If you receive the distribution of the excess deferral and earnings by April 15th then please note for the Tax Year 2024 tax filing due April 15, 2025:
Two 2024 Forms 1099-R will be issued reporting the excess.
- Form 1099-R with Code P in box 7 can be ignored if you already reported the excess as in 2023.
- However, the earnings on Form 1099-R with Code 8 in box 7 should be reported in 2024.
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