I over contributed to my 401K in 2023. I realized this as of March 2024. I contacted my old employer and they have notified Fidelity to make a distribution in 2024 removing the excess contribution in 2023. They have indicated that I will receive a 1099-R in 2025 from Fidelity. How do I report this on my 2023 tax return and if I roll this over into my IRA will I owe taxes on it?
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You cannot rollover an excess contribution to a 401(k).
You must include the excess deferral in your wages in the year the excess deferral happened.
Please follow the steps below:
If you receive the distribution of the excess deferral and earnings by April 15th then please note for the Tax Year 2024 tax filing due April 15, 2025:
Two 2024 Forms 1099-R will be issued reporting the excess.
Please see Pub 525 for additional information.
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