1) Yes, you can ignore Form 1099-R with code P but you need to enter the Form 1099-R with code 8 on your 2024 return. You also need to amend your 2023 return to correct the amount of excess deferral to $2,000. Please see How do I amend my federal tax return for this year?
2) To clarify, you requested to withdraw $1,500 but you only received $1,400 from the Roth 401(k)?
You might have to check with your custodian.
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.
Since you failed to withdraw the excess by April 15, 2024 the excess becomes pre-tax money in the Roth 401(k), taxable upon distribution . Therefore your distribution from the Roth 401(k) should be a taxable distributions of this excess (and earnings attributable to the excess). Please check with the custodian.
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