Yes, you reduce your total contribution by the $25 excess and do not include that in your total deduction for 2023. You should enter the amount as elective deferrals. Since you removed the excess by April 15, there is no income to report .
Please note for the Tax Year 2024 tax filing due April 15, 2025:
2024 Forms 1099-R will be issued reporting the excess.
- Form 1099-R with code P in box 7 can be ignored if you reported the excess as described in 2023 above.
- The interest/earnings will be income in 2024 ($3.00).
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