You don't edit the W-2, enter it as shown. You can ignore the excess deferral message since you took the steps to fix it.
Yes, you must include the excess deferral in your wages in the year the excess deferral happened and you can use the steps you mentioned.
If you receive the distribution in time (by April 15th) then you will receive a 2024 Form 1099-R with code P for the excess deferral and you can ignore it since you used the steps above to include it on our 2023 return. You will also receive a 2024 Form 1099-R with code 8 for the earnings and withheld taxes, this will be entered on your 2024 return.
If you do not get the distribution in time then you will get a 2024 Form 1099-R for a regular distribution and this has to be entered on your 2024 tax return.
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. This happens once when you contribute it and again when you receive it as a distribution. You can't include the excess amount in the cost of the contract even though you included it in your income.
@ImpostoRapido
@jannethu No, you don't need enter your Roth IRA contribution in the IRA contribution section since you withdrew the excess plus earnings by the due date. If you entered it already, then you can enter that you withdrew the excess contribution amount on the penalty screen at the end of the IRA contribution interview.
If you don't report it now on your 2023 return then you will have to amend your 2023 return to report the 2024 Form 1099-R with codes P and J.
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