You can just report with the steps mentioned above by Tax Expert MinhT1.
If you receive the distribution of the excess deferral and earnings by April 15th then please note for the Tax Year 2023 tax filing due April 15, 2024:
- 2023 Form 1099-R with code P in box 7 can be ignored if you reported the excess as described above in 2022.
- The earnings on 2023 Form 1099-R with Code 8 in box 7 should be reported in 2023.
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.
@Wolf43
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