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excess contribution to 403b

I had an excess contribution of $851in 2023.  I noticed it in January 2024 and notified my plan administrator. The excess plus growth were refunded to me in Feb 24.  Employer will not issue a corrected W-2 since refund did not come thru payroll.  Employer will provide 1099s for excess contribution and for growth for 2024.

 

TT instructions are below

Do these instructions refer to entering my own 1099-R form(s); one for the contribution and one for the growth?

Instructions say to use code P.  Code P says Return of contribution taxable is 2022.  Is that a typo since this has nothing to do with 2022?

If the growth is taxable and I report it on my 2023 return, won't I have to report it again in 2024 when my employer sends me a 2024 1099-R form with the growth since it was distributed in 2024?

 

Turbo Tax instrcutions:

1. Report the excess deferral on your 2023 return in the Income section for Retirement Plans and Social Security whether 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 2024 Form 1099-R.
2. In 2024, 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 2024 return, and we'll only add the earnings to your 2024 income.

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1 Reply
DanaB27
Expert Alumni

excess contribution to 403b

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2022" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2023.

 

The excess deferral is reported on your 2023 return and the earnings will be reported on your 2024 return. You will get two 2024 Forms 1099-R in 2025:

  • Form 1099-R with Code P in box 7 can be ignored if you reported the excess on your 2023 return when you filed it. 
  • However, the earnings on Form 1099-R with Code 8 in box 7 should be reported in 2024.

 

To report the excess deferral on your 2023 return you can either enter Form 1099-R with code P as described in the TurboTax instructions or you can use these steps:

 

  1. Click "Federal Taxes" on the top and select "Wages & Income"
  2. Click "I'll choose what to work on"
  3. Scroll down "Less common income" and click "Start" next to "Miscellaneous Income, 1099-A, 1099-C"
  4. Select "Other income not already reported on a Form W-2 or Form 1099" and click "Start"
  5. On the "Did you receive any other wages?" screen answer "Yes" and click "Continue"
  6. Continue until you get to the "Any other earned income" screen, answer "Yes" and click "Continue"
  7. On the "Enter Source of Other Earned income" screen select "Other" and click "Continue"
  8. On the "Any Other Earned Income" screen enter "2023 Excess 401(k) Deferrals" for the description, enter the amount and click "Done".
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