If you received a 2024 401(k) excess deferral distribution in 2025, you'll receive a 2024 Form 1099-R with distribution Code P in box 7; however, it must be included on your 2024 tax return. You have two options to do that:
1. Wait until next year when you receive the 2024 Form 1099-R and amend your 2024 tax return.
2. Report it now on your 2024 return and ignore the 2024 1099-R when it comes next year.
If you haven’t filed your 2024 return yet and want to report a 2024 excess 401(k) deferral that was distributed in 2025:
- Sign in to TurboTax and open or continue your return.
- Select Federal, then Wages & Income.
- Under Less Common Income, select Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C.
- Select Start next to Other income not already reported on a Form W-2 or Form 1099.
- Answer Yes to Did you receive any other wages?, then Continue.
- Continue until you get to the Any other earned income screen. Answer Yes and select Continue.
- On the Enter Source of Other Earned income screen, select Other and Continue.
- On the Any Other Earned Income screen, enter 2024 Excess 401(k) Deferrals for the description, enter the amount, and select Done.
For Tax Year 2025:
Your 2025 Form 1099-R form will be issued reporting the excess 2024 401(k) deferral you received as a distribution in 2025.
You can ignore a Form 1099-R with code P in box 7 if you reported the excess as described above in 2024.
But, the earnings on Form 1099-R with code 8 in box 7 should be reported in 2025.
If your 2025 Form 1099-R has an amount in box 4, Federal tax withholding and/or box 14 State withholding, then you must enter it on your 2024 tax return. The 2025 Code P won’t affect your return, but the withholdings will be applied to 2025.
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