Excess 401k Contribution and rolled over to IRA account

[Stvn_72]

I realized that over contributed my 401k and I already rollover my 401k to my IRA. The excess amount is under 6000. Is there a way I can use that excess amount as my IRA contribution for the year so I won't have to get that tax? How do it file my tax?

[dmertz]

Yes, you can do that (assuming that your W-2 shows at lease that much in box 1 to support an IRA contribution).  Because the excess contribution was ineligible for rollover, the excess contribution to the 401(k) became an ordinary contribution to the traditional IRA when deposited into the traditional IRA.  You would report that as a traditional IRA contribution the same as if the excess (and attributable earnings) had been distributed to you and you used the cash to make the deposit to the traditional IRA.

Unless the 401(k) plan issued Forms 1099-R that already reflect a return of the excess contribution, the (probably code G) Form 1099-R reporting the rollover from the 401(k) does not reflect what actually happened, so corrected of substitute Forms 1099-R will need to be entered such that what is reported with code G is only the portion that was actually eligible for rollover.  The rest would be reported as a taxable distribution(s).  If the Net Attributable Earnings on the excess was positive and distributed in 2025, that portion would be reported on your 2025 tax return.

[Stvn_72]

@dmertz Thanks. Yes my W-2 form in box 1 vs box 3 difference is my excess contribution. So If I want to do the traditional IRA contribution, do I just fill out the IRA contribution section for that amount. Is there anything else I need to do to support the excess contribution when I file my tax on Turbo Tax? just wanted to make sure I file correctly so I don't get flag.

[dmertz]

I think I already explained all of that above.  Enter as your ordinary traditional IRA contribution the amount that was ineligible for rollover.  The rollover reported on your tax return is to reflect only the amount that was eligible for rollover.  The excess contribution to the 401(k) and it's attributable earnings is the portion that was not eligible for rollover.  If you do substitute Forms 1099-R these will require an explanation statement and the tax return will need to be printed and mailed, so hopefully the 401(k) plan will provide you with Forms 1099-R that correctly reflect the distribution of the excess.