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401K Over-Contribution Not Being Refunded This Year

My employer messed up with some paperwork and as a consequence I contributed more to my 401K than the legal limit. I've talked to the plan administrator and they will process a refund but according to them this won't happen until the end for April and will be considered income for 2019.

Turbo Tax says that I need to file a 1099-R but I haven't had the money returned yet so there's no paperwork. What should I do here?

Additionally, TurboTax won't let me E-File my taxes since this is an "error" on the form. Is there a way around that or do I have to paperfile?

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Level 4

401K Over-Contribution Not Being Refunded This Year

If you overcontributed to your 401(k) in 2018 and the excess was distributed in 2019, you need to include the excess contribution to your 401(K) on line 1 of your 2018 Form 1040 by following these steps: 

  • Open your return
  • Click on the "Federal Taxes" Tab
  • Click on the "Wages & Income" Tab
  • Click on "I'll choose what I work on"
  • Scroll down to "Less Common Income" and click "Show More"
  • Select "Miscellaneous Income" and click "Start or Update"
  • Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
  • Answer the Question "Did you receive any other wages?  Yes"
  • Click "Continue" through the questions until you get to "Any Other Earned Income"
  • Answer "Yes" to "Did you earn any other wages?"
  • Indicate "Other" as "Source" of Other Earned Income and click "Continue"
  • For the description enter "2018 Excess 401K Deferrals" and click on "Done"

You will receive a Form 1099-R in 2019 with a code P in box 7 which you can ignore if the excess deferral is reported as suggested above.  However, the earnings (if any) will be reported on a separate 2019 Form 1099-R with a Code "8" in Box 7 that should be reported on your 2019 tax return.

Unfortunately, you will need to paper file your return this year due to the excess 401(K) Contributions.

Please comment below if this does not answer your question so I can assist you further.

View solution in original post

22 Replies
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New Member

401K Over-Contribution Not Being Refunded This Year

Hi there, I heard that there was a bug and was fixed on 4/5/19.  Is this correct?  Meaning, after the bug is fixed, I do not need to do paper filing?
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New Member

401K Over-Contribution Not Being Refunded This Year

Today is April 7th and the bug is not fixed.  I can’t continue with the filing
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Returning Member

401K Over-Contribution Not Being Refunded This Year

i am in the same boat.   Will Turbotax be fixing this or is paper filing a requirement?
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New Member

401K Over-Contribution Not Being Refunded This Year

in same boat. Can turbotax fix this?
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New Member

401K Over-Contribution Not Being Refunded This Year

An update:  <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4698409-excess-401-k-contribution-preventing-e-file">https://ttlc.... on April 12th!!!
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New Member

401K Over-Contribution Not Being Refunded This Year

Thank you slamster!!! I will be working on this on the weekend and hope I won’t be dealing with paper filing this year.  If the fix comes through that would be amazingly helpful.
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New Member

401K Over-Contribution Not Being Refunded This Year

I will watch this page for updates <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/7327357">https://ttlc.intuit.com/replies/7327357</a>
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New Member

401K Over-Contribution Not Being Refunded This Year

Same place here. So glad to see I'm not alone.
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New Member

401K Over-Contribution Not Being Refunded This Year

Poor me as well, on the same boat. In fact, the problem is not yet fixed because the code P stands for "Return of contribution taxable in 2017", but not 2018.
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New Member

401K Over-Contribution Not Being Refunded This Year

This fix didn't work for me - do i have to print and file?
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New Member

401K Over-Contribution Not Being Refunded This Year

@Rachel_W  please help.  I tried to follow your instructions but at the final review TT is asking me to fill out info for a ghost 1099 I don't have.  Is this the error that prevents people from e-filing?  What should I do--type in a few of the boxes I know how to answer in the Forms view (I don't think P is the right code since it says it's for 2017)?  Or should I try to print what I have and mail it in and hope for the best?  Please help!
thank you
Highlighted
New Member

401K Over-Contribution Not Being Refunded This Year

@Rachel_W  please help.  I tried to follow your instructions but at the final review TT is asking me to fill out info for a ghost 1099 I don't have.  Is this the error that prevents people from e-filing?  What should I do--type in a few of the boxes I know how to answer in the Forms view (I don't think P is the right code since it says it's for 2017)?  Or should I try to print what I have and mail it in and hope for the best?  Please help!
thank you
Highlighted
New Member

401K Over-Contribution Not Being Refunded This Year

@Rachel_W  please help.  I tried to follow your instructions but at the final review TT is asking me to fill out info for a ghost 1099 I don't have.  Is this the error that prevents people from e-filing?  What should I do--type in a few of the boxes I know how to answer in the Forms view (I don't think P is the right code since it says it's for 2017)?  Or should I try to print what I have and mail it in and hope for the best?  Please help!
thank you
Highlighted
Level 4

401K Over-Contribution Not Being Refunded This Year

If you overcontributed to your 401(k) in 2018 and the excess was distributed in 2019, you need to include the excess contribution to your 401(K) on line 1 of your 2018 Form 1040 by following these steps: 

  • Open your return
  • Click on the "Federal Taxes" Tab
  • Click on the "Wages & Income" Tab
  • Click on "I'll choose what I work on"
  • Scroll down to "Less Common Income" and click "Show More"
  • Select "Miscellaneous Income" and click "Start or Update"
  • Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
  • Answer the Question "Did you receive any other wages?  Yes"
  • Click "Continue" through the questions until you get to "Any Other Earned Income"
  • Answer "Yes" to "Did you earn any other wages?"
  • Indicate "Other" as "Source" of Other Earned Income and click "Continue"
  • For the description enter "2018 Excess 401K Deferrals" and click on "Done"

You will receive a Form 1099-R in 2019 with a code P in box 7 which you can ignore if the excess deferral is reported as suggested above.  However, the earnings (if any) will be reported on a separate 2019 Form 1099-R with a Code "8" in Box 7 that should be reported on your 2019 tax return.

Unfortunately, you will need to paper file your return this year due to the excess 401(K) Contributions.

Please comment below if this does not answer your question so I can assist you further.

View solution in original post

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