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Retirement tax questions
Thanks again for the prompt response macuser_22! It is truly appreciated.
Yes - I'm positive all of the 401k contributions were made to a designated Roth as evidenced by code AA in box 12 of both my 2019 and 2020 W-2s.
I am a fairly new member to this 401k plan as I changed employers in Nov 2019. Is the plan sponsor indicating a taxable amount in Box 2a because this corrective distribution is somehow being deemed an early withdrawal because it happened in the first year of me being part of this plan? Also, I am not over 59 1/2...does that have anything to do with it? Even so, it seems code B should be in Box 7 somewhere acknowledging this 1099-R is associated with a Designated Roth, right? But more to the point, what else can make this corrective distribution from a Roth 401k taxable (Box 2a)? It seems my plan sponsor has made a mistake, or I am being taxed for correcting an excess contribution that occurred in Year 1 of my participation in a new Roth 401k plan. The latter doesn't sound right since changing employers is one of the main reasons these excess contributions happen in the first place.
Like you, I'd be hesitate to think a large plan sponsor would make a mistake. However, I'm not convinced I should be taxed on a withdrawal of a contribution from a Roth 401k plan...even an excess contribution. I do expect to be taxed on the earnings from that withdrawal because it's been within 5 years and I'm under 59.5.
I'm hopeful this additional info will assist. Thanks again for your help.