Did you receive any kind of a tax document along with the refund check? If your 401K contribution was overpaid, make sure that your W-2 is correct. Assuming it is (and that you've picked up the correct income amounts - noting that Box 12a shows the correct amount of your contribution under Code D) and assuming that you did not receive any documentation other than the check (e.g., Form 1099-R, 1099, etc) you need not pick up the disbursement check for the overpayment amount - as this is not additional income for you if it's already reflected in the W-2. However, if additional withholding taxes were taken, you'll want to pick up these amounts that sound like they are in excess of the wh amounts reported on your W-2, so that you get credit for them. I would pick them up by overriding the amounts shown on the W-2 for federal/state withholdings. You may end up getting a tax notice, but this should be easily explained, along with inclusion of the proper documentation. Sorry, I couldn't find any other likely spot to report the excess withholding taxes taken! If you did receive a tax document along with the disbursement check (unlikely!) that might change the way you report it.
