If the excess is removed prior to April 15, you will not have to report it as income in 2020. If the excess deferral is removed after April 15, you will have to include it in your income in both 2019 and 2020. You will receive a Form 1099-R to include on your 2020 tax return. Any income earned on the excess will be included on the 1099-R. You also need to go ahead and add it to your 2019 income. To do this in TurboTax Online:
- Click on Personal
- Click on Personal Income
- Click on I'll chosse what I work on
- Scroll down to "Less Common Income"
- 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 through the questions till you get to Any Other Earned Income
- Answer Yes to "Did you earn any other wages?
- Indicate "Other" as Source of Other Earned Income and click Continue
- For the description enter "2019 Excess 401K Deferrals" and click on Done
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