@dmertz
turbotax example instruction which matches my scenairo( i got excess contribution of $93 returned by the plan adminstrator) says -
Enter As if i got a 1099-R with the overpayment amount in boxes 1 and 2a and code P in box 7, even though i did not get 10990-R.
Should i follow this 1099-R path or report it on Form 1040 line 1?
Example 1:
Jessica is 45 years old and changed jobs in 2020 She contributed $15,000 to her 401(k) plan at her first job. She contributed $16,000 to her 401(k) plan at her second job. Because the maximum she can contribute in 2020 is $19,500, Jessica put too much money into her 401(k) accounts. She figured this by taking the difference between her total contributions ($31,000) and the maximum she can contribute ($19,500). This overpayment (called an excess salary deferral) must be withdrawn as soon as Jessica discovers it, and no later than the filing deadline (normally April 15, 2021) to avoid additional taxes.
Jessica notifies the plan administrator of her second job, and they issue her a refund of the overpayment plus earnings. She reports this on her 2020 return as if she received a Form 1099-R with the overpayment amount in boxes 1 and 2a and code P in box 7.
On her 2021 return, Jessica enters the forms she received from the plan administrator. Only the earnings on the overpayment will be added to Jessica's 2021 income.
