Excess 401K contribution, withdrawn, W2 correction? need Taxreturns help

[rohit1st]

I used online. Apparently there's a work-around to re-file on desktop as well.

[mrm312]

I just updated turbo tax, and I was able to e-File using Mac desktop version. Took about 5-10 minutes to get the confirmation email after completing Turbo Tax "interview" process/e-file. @macuser_22 I really appreciate your help - your comments here and here ( <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4635933-how-do-i-submit-a-1099-r-for-2018-401k-excess-contribution...> ) really helped me take care of this confusing process...so thanks

[pish180]

Works now!

[turkeymooney]

Is this fixed now for 2019 tax filing? I just found out I have excess deferral. Just to confirm, my employer doesn't need to make an amended W-2, correct? They just need to send 1099-R for 2019 and a check for the excess before April 15?

[littleAnnje]

related question - 401K excess due to multiple employers.

Does the tax code require one to amend the latest employers W2 or can any employer amend their W2 and the relevant plan administrator adjust the amount in that administrators controlled 401K plan, to eliminate the excess?  In other words, must it be the most recent employer for the year the excess occurred or can it be an earlier employer in that year?

[LindaB1993]

You can ask any of the 401k plans to which you contributed in 2019 to return the excess deferral, and not necessarily the last one to which you contributed.

If the total of your elective deferrals is more than the limit, you can have the difference (called an excess deferral) returned to you from any of the plans that permit these distributions.

Check your plan documents to see if the company has an after tax option, not all companies do. This isn't the same as the Roth 401K option. The after tax option will not save on taxes this year, and it will not grow tax deferred, but it will allow you to maximize the company match with your new company.

[turkeymooney]

So Turbo Tax told me to do this below. I am filing for 2019 return. However, Box 7 code P says: Return of Contribution Taxable in 2018.

My excess deferral is for 2019. Not 2018. Please help.

Thank you

1. Report the excess deferral on your 2019 return in the Income section for Retirement Plans and Social Securitywhether or not you received a Form 1099-R before you file your return. Enter as much information as you can. Report the excess deferral amount in boxes 1 and 2a, and use code P in box 7. Indicate that this is a 2020 Form 1099-R.
   
   5. In 2020, you will probably receive two Forms 1099-R. One reports the excess deferral amount. The other reports the earnings on the excess deferral. Enter both of these forms in your 2020 return, and we'll only add the earnings to your 2020 income.

[MaryK4]

Box 7 Code P says: Return of Contribution Taxable in 2018 for the entry this year, but next year it will say Return of Contribution Taxable in 2019.  Because you are entering it early you have to enter "as if" - I always thought it might be cleared if it said "the prior year" instead of a specific year.

@turkeymooney

[unimaginative]

@MaryK4 So do we need to do both steps? File a 1099-R with code P and add the excess contribution as miscellaneous income?

[DawnC]

This thread is a couple of years old, so please confirm the details of your specific situation.  

If you over contributed in 2019 but removed it in 2020, then all you have to do on your 2019 tax return is to add the excess contribution as described in the first reply of this thread.

Next year, you will receive the 1099-R with the code P which you will enter on your 2020 tax return - but it will not be taxed since you are correcting the issue now by adding the excess contribution to your income on your 2019 return.   You will get a message next year that says ''you may need to amend'' but you won't need to if you add the contributions back to your income when you file your 2019 return. 

If your details are different, please let us know.  

@unimaginative