No, you don’t have an excess contribution, you removed the excess contribution with a loss. Fidelity followed the rules correctly.
You will enter the full amount of the excess contribution (the original amount of $3,730) on your 2022 tax return.
The loss will have to be reported on your 2023 tax return:
- Login to your TurboTax Account
- Click "Federal" from the left side of your screen
- Scroll down to "Less Common Income" and click "Show More"
- Scroll down to "Miscellaneous Income, 1099-A, 1099-C" and click "Start"
- Select "Other reportable income" and click "Start"
- Answer "Yes" to "Any Other Taxable Income?"
- Enter "Loss on Excess Deferral Distribution” and enter the loss as a negative number (-$15)
“Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. Include the loss as a negative amount on Schedule 1 (Form 1040), line 8z, and identify it as Loss on Excess Deferral Distribution”. (Pub 525)
@vijayar
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