@romeshdaisy Yes, I have the same situation that you mentioned. My employer failed ADP testing and had to return excess 401(k) deferrals to about 6 employees. This is for 2018 deferrals. Checks were issued by Fidelity and returned to employees prior to April 15, 2019. Employees received a 2019 1099-R, with a distribution code 8 in box 7 which has the definition of (Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2019. So under these circumstances, we would not add the excess deferrals to our 2018 income because they are taxable in 2019 -- the year of distribution.
