excess contribution

[CL7]

On 4/13/23, while I was preparing for the 2022 tax return, I found out that I had an excess contribution of $109, so, I contacted my company which referred me to Fidelity the Administrator. Fidelity said that I passed the 3/2023 deadline so Fidelity would not be able to make any changes.  Though I hadn't received the excess contribution, I reported it on my 2022 tax return under other income. Afterward, I contacted my company but it said that they would neither withdraw the excess from my retirement a/c nor send me an amended W2,  how should rectify this tax situation?  Thanks!

[dmertz · Accepted solution]

There is nothing more for you to do.  The $109 excess deferral will simply be taxed a second time when eventually distributed.  Even though you paid tax on this money, it did not create any after-tax basis in the plan.

[CL7]

Thanks for your prompt reply!

Would you suggest I amend the 2022 return since I have never received an excess retirement contribution? Then, wait till I get the distribution (when I retire) & pay the tax all at once. Thanks!

[dmertz]

Since you have already included the $109 on your 2022 tax return as other income, there is nothing to amend with regard to this.

[CL7]

Even though I have not received any W-2 or excess distribution from my company, I still should report it as other income in the tax return 2022, right? Thanks!

[dmertz]

I inferred from "Though I hadn't received the excess contribution, I reported it on my 2022 tax return under other income" in your original post that this meant that you did not receive a distribution of the $109 excess contribution and that you had already included the $109 as other income.  I assume that you received a 2022 Form W-2 that reported your contributions, including the excess, in box 12 (with code D, I'm guessing) and entered that into 2022 TurboTax as received.  I inferred from your question about amending your 2022 tax return that you have already filed your 2022 tax return prepared in this way.  If so, there is nothing more for you, your employer or Fidelity to do.

I'm I misunderstanding something?

[CL7]

Thanks for your detailed reply.

I have 1 full-time job and a part-time job. My full-time employer said that I didn't have any excess contribution. The part-time job (with Fidelity as Administrator) was the one that triggered the excess. I did report (the part-time job) W2 amount on 12a (code D).  During the Smart Check, Turbo Tax  2022 software informed me that I had an excess contribution of $109.  So, I included this excess under Other Income. I did contact Fidelity and my part-time employer but couldn't receive any help by their sending me an amended W2 or backing out the excess.  Now, I don't know if I have made a mistake in including $109 on my 2022 Tax Return without an amended W2. Should I amend it & pay the tax all at once when I receive the distribution in the future?  Thanks again for your input.

[dmertz]

The only thing necessary is to include the $109 as other income on your 2022 tax return, which you indicate you have already done.

[CL7]

Thanks again! Dmertz