How do I report excess contributions to my pre-tax 401(k) for the 2018 tax year that were withdrawn this month before the deadline?

tsonder305 · ‎June 4, 2019

I had an excess contribution to my 401k in 2018, which I withdrew this month before the deadline. My 1099-R won't be ready in time, so I wanted to see if anyone knew what should go where. I'm going to change the numbers to make it easier. I overcontributed $1,000, but that amount was only worth $980 when pulled out. For Box 1, "gross distribution," should that be the $980 I got or the $1,000? My understanding is Box 2a should be the full $1,000 (and then I can deduct the $20 loss in 2019). And then for Box 7 should be 8, correct (in spite of the fact that the brokerage told me P)? Thanks in advance!

Rachel_W · ‎June 4, 2019

You are absolutely correct.

You should report the full $1,000 in Box 2a and use "8" for Box 7. When you receive the 1099-R next year, you can just disregard it since you have already included it on your 2018 Tax Return.

In addition, on next year's return you can deduct the $20 “Loss on Excess Deferral Distribution".

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How do I report excess contributions to my pre-tax 401(k) for the 2018 tax year that were withdrawn this month before the deadline?

Retirement tax questions