You need to include the over-contribution to your 401(k) as wages on your 2018 Tax Return. (See instructions below)
Next year, you can include the $208 loss as a negative amount on Schedule 1, line 21 of your 2019 Form 1040. You can identify the loss as “Loss on Excess Deferral Distribution.”
To add your $2,852 401(K) overcontribution to your 2018 Wages, please follow these steps:
- Login to your return
- Click "Take Me To My Return"
- Click "Federal" on the left side of your screen
- Scroll down to "Less Common Income" (You may need to click "Show All" to get this option to pop up)
- Select "Miscellaneous Income, 1099-A, 1099-C" and click "Start or Update"
- Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
- Answer "Yes" to the Question "Did you receive any other wages?"
- Click "Continue" through the questions until you get to the section "Any Other Earned Income"
- Answer "Yes" to "Did you earn any other wages?"
- Indicate "Other" as Source of Other Earned Income and click "Continue"
- For the description enter "2018 Excess 401K Deferrals", enter the amount, and click on "Done"
