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July 12, 2022
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401k Excess Contribution, mix of Roth and pre-tax

  • July 12, 2022
  • 16 replies
  • 124 views

Hi, I made an excess contribution of $600 to due to a typo when entering my previous contributions when transitioning to my new employer. At my new employer, I've contributed more than $600 in Roth and the rest in pre-tax since I decided I would prefer pre-tax.

Since I've contributed to both Roth and pre-tax, I have a few questions:
1. Can I select to do an excess distribution of $600 and any earnings from just my Roth contributions?
2. Since Roth is after-tax, I assume I won't need to have my employer make any adjustments to my W2. Is this correct? If so, am I able to directly tell my plan administrator (Fidelity) and have them do the excess distribution, or should I be asking my employer this? I haven't told my employer yet because they've made some big hiccups in the past, and I'm afraid they won't understand that I want to do an excess distribution from my Roth and not my pre-tax, so I would prefer to work with Fidelity directly if possible.
3. Do I need to enter any information into TurboTax when I do my taxes next year? I will do the excess distribution this year to get it over with and avoid going into the next calendar year, and most likely I will not have any earnings by the time the excess distribution is done with the way the current market is.

    Best answer by Critter-3

    Can you elaborate on why my employer needs to know if I am going to be making the excess distribution from Roth though?


    Because that affects the entry on box 12 ( codes D or AA)   of the W-2 so they need to know ... don't bank on the plan administrator to do this for you. 

    16 replies

    Critter-3
    Level 15
    July 12, 2022

    @dmertz 

     

    I am fairly certain that you are SOL  since this was not taken care of by the filing deadline of 4/18/22 but my buddy dmertz should be by to confirm that.  If so there is nothing you can do about it except pay the penalty for the excess on the 2021 return. 

    July 12, 2022

    I am talking about 401K for 2022, meaning filing taxes in 2023.

    Critter-3
    Level 15
    July 12, 2022

    Ok ... that is a different story ... stop any further contributions and have the  excess contribution taken from one of the accounts by the end of the year.   Talk to the plan administrator for directions on how to do this.