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: Once when you contribute it, and again when you receive it as a distribution. You cannot include the excess amount in the cost of the contract even though you included it in your income.
Please contact the plan administrator where you made the last contribution and have the excess and earnings withdrawn by April 15th.
You will get two 2021 Forms 1099-R to report the excess:
- Form 1099-R with code P in box 7 has to be reported on your 2020 return. Since you filed your 2020 return already you can wait to amend the return until you receive the Form 1099-R.
- The earnings on Form 1099-R with Code 8 in box 7 should be reported in 2021.
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