do I file on time even tough I had an over contribution to a ROTH 401k in2024?

[Deb113]

I had 2 jobs in 2024 and had already maxed out my contribution allowance to my 401k which is a Roth 401k with my previous employer.  

When I started my new job in the fall, I signed up for Roth 401k withdrawals with my new employer, not thinking I should have had the withdrawals start in 2025.  I caught the mistake in the first paycheck, then called Fidelity which handles the plan for the new employer about the problem.  They advised me to call back after I received both my w-2's and to fill out a from to reverse the over contribution. 

I have not gotten a form saying the extra has been taken out of my account and April 15th is coming up soon.  What is my best option come tax day?

File on time , then file an amended return ?  Or file for an extension and put in the corrected information.  Also, because it went into a Roth account it's already taxed prior to contributing...so how does this affect my filing? Would it be better to just leave it in?   I'm confused- there aren't a lot of questions pertaining to a Roth that was over contributed to.

[DanaB27 · Accepted solution]

You need to make the request to withdraw the excess as soon as possible. If you do not take out the excess amount by April 15th, then you are taxed twice on the excess deferral left in the plan.  This happens once when you contribute it 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.

You do not need to add the excess to your wages on your 2024 return since this was a Roth 401(k). You can go ahead and file your 2024 return.

If you get the excess distributed before April 15th then you only need to report the earnings on your 2025 return when you get the 2025 Form 1099-R with code 8.