401K overcontribution in 2021

3 replies
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Hi, I switched employers in 2021, and ended up overcontributing to my employment 401K. Unfortunately, I noticed that this year. Would like to understand what my options are now? Thanks in advance!

ThomasM125

Alumni - Intuit

You need to amend your tax return for 2021 to add the additional income to your taxable income. You will see an option on your home page when you log into TurboTax to file an amended return.

This is how you enter the overpayment in TurboTax:

Choose the Federal option on your left menu bar
Choose Wages & Income
Find Less Common Income
Choose Miscellaneous Income, 1099-A, 1099-C
Choose Yes to the question regarding receiving other wages
Continue until you see Any Other Earned Income and choose Yes
Choose the Other option on the page that says Enter Source of Other Earned Income
Enter a description and the amount of income you are reporting

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ctalAuthor

Level 2

Thanks @ThomasM125 for your reply. I had used a CPA to file my 2021 return. So, can I use TurboTax to amend my return?

DanaB27

Employee Tax Expert

If you didn't use TurboTax to file your tax return, you can use TurboTax to prepare the amendment. However, you'll first have to enter your information into TurboTax to match what you filed the first time, then start the process of amending it. You will need to purchase the 2021 TurboTax software, please see TurboTax Download 2021. You might want to check with the CPA who filed your 2021 return if he will file the amended return free of charge, he should have noticed the excess deferral listed in box 12 of your W-2s.

Please be aware, since you did not take out the excess amount by April 15th, 2022, you are taxed twice on the excess deferral left in the plan. This happens once when you contribute it (with the steps provided by Tax Expert ThomasM125) and again when you receive it as a distribution. You can't include the excess amount in the cost of the contract even though you included it in your income.

@ctal

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