In this case, you will need to adjust your tax return for the excess contributions returned in 2021 from Fidelity.
To do this in TurboTax, follow these steps from @MinhT1, reposted here:
- In the Jobs(W-2) section of Income & Wages, adjust Box 12 to the corrected amount of the 401(k) contribution maximum taking into consideration your second W-2.
- Next, scroll down to Less Common Income and Show More.
- Select Miscellaneous Income and click Start
- Select Other income not already reported on a Form W-2 or Form 1099 and click on Start
- At Did you receive any other wages? select 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 "2020 Excess 401K Deferrals" and click on Done.
In 2021, the 1099-R will be issued for any earnings that were made on the excess contributions. This will be reported in the 2021 return. For more information, see: 2020 Publication 525: Taxable and Nontaxable Income page 11, middle column.
[Edited 04/17/2021 | 1:11 PM PST]
@orangelena
