You will enter the form W2 just as your copy indicates. Then you will enter the excess contribution that was distributed to you as "Miscellaneous Income" following the steps below.
- Click "Federal" from the left side of your screen
- Scroll down to "Less Common Income" and click "Show More"
- Select "Miscellaneous Income" and click Start or Update
- Select "Other income not already reported on a Form W-2 or Form 1099" and click on Start
- Answer the Question "Did you receive any other wages? Yes
- Click "Continue" through the questions until you get to "Any Other Earned Income"
- Answer "Yes" to "Did you earn any other wages?
- Select "Other" as Source of Other Earned Income and click Continue
- For the description enter "2021 Excess 401K Deferrals" and click on Done
When you report the Excess Contributions in this way, you won't need to go back and amend your 2021 return. When you get the 2022 1099R, just keep it for your records. The 1099R should have a code P in box 7 indicating the distribution was for excess contribution to 401K which you will have already taken care of.
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