@RussWill wrote:
I made an excess contribution to a ROTH 401k in 2019. It was discovered late and the plan sponsor could not send me a corrective distribution (return of my excess contribution) or any earnings on the excess before the tax filing deadline of April 15, 2020. In June 2020, I received two 1099-Rs...one with a code of 7 in Box 7 for the 2019 excess contribution ($2666.66) and one with a code of 8 in Box 7 for the earnings ($1.74). I'm working on my 2020 taxes now and understand from this thread that the earnings of $1.74 need to be reported on my 2020 tax return. What do I do with the other 1099-R? Since this is a ROTH 401k, do I need to report/file anything for the 1099-R showing the return of my excess contribution with code P in Box 7 and with $2666.66 in Box 1 and Box 2a? It doesn't seem right to ignore the 1099-R with the code P, but at the same time, I don't see the need to report this distribution anywhere since this is a Roth 401k. Are there different rules since I couldn't get the excess contribution returned before the filing deadline of April 15th?
Any advice is much appreciated!
First you said a code 7 in box 7 and then a code P.
A code P for a designated Roth should have the returned excess in box 1 and a zero in box 2a. Since a designated Roth did not reduce your 2019 taxable income, it does not get entered anywhere - keep it for your records.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
