No, you do not file a Form 1099-R for an excess contribution made by the employer. Neither do you remove the excess contribution. Removing an excess contribution, including any earnings, issuing a 1099-R, and reporting the earnings on the excess contribution on your tax return for the year of the contribution is how you handle an employee excess salary deferral.
The excess employer contribution, or excess nondeductible contribution amount needs to remain in the solo 401(k). It is carried forward and deducted in the following year(s). The excess contribution is subject to a 10% penalty for each year it is carried forward.
The penalty of 10% is reported by filing IRS Form 5330 - Return of Excess Taxes Related to Employee Benefit Plans. Form 5330 must be filed by the last day of the seventh month after the close of the plan year.
It would be a good idea to consult with your Solo 401(k) plan administrator.
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