@sr9984 wrote:
I found another article that claims we should create a 1099-R in the current tax year: https://ttlc.intuit.com/community/retirement/discussion/reporting-excess-roth-401k-contribution/01/1...
That procedure is NOT correct for a designated Roth (401(k) Roth).
The returned *contribution* does not get entered as income.
If this was a 2019 excess returned *in* 2020 then you should receive 2 1099-R's in 2020. One with a code "PB" on box 1, the returned amount in box 1, zero in box 2a. That is reported in 2019, but will do nothing since the code B will not add it to your income - it simply reports it to the IRS.
The other 1099-R should have a code "8" in box 7 and the earnings in box 1 and 2a which will be taxable in the year returned, 2020.
The is explained in IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
quote
"If the distribution was for a 2019 excess deferral to a designated Roth account, your Form 1099-R should have codes B and 8 in box 7. Do not add this amount to your wages on your 2019 return"
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
