My prior employer failed their 2023 compliance testing, but I rolled over that 401k w/ADP into my Vanguard IRA in January 2024. I received a 2024 1099-R for the excess contributions. I believe that I need to unwind this with Vanguard. However, Vanguard is requesting an earnings/loss statement from ADP in order to remove the excess portion. ADP, who issued me the 1099-R with the Distribution Code 8, is telling me they are unfamiliar with this request and it shouldn't be necessary in this instance.
Why would Vanguard need an earnings-loss statement from ADP? I'm already being taxed on the entire excess distribution. Wouldn't Vanguard just need to calculate the earnings-loss from the time of rollover? I'm not blaming this on either provider and it's most likely due to my lack of understanding.
You need to remove the excess contribution and any earnings associated with it, whether the earnings occurred before or after the rollover. You should ask ADP to provide you with a calculation of any gain or loss on the excess contributions until the time you did the rollover. It's the same thing they would have to do if you had not done the rollover. It's a bit of an unusual situation, so you might need to speak to more than one person before you find someone who understands and can help you.