Excess Deferral (to 401k & TSP) in 2020

[jcohn27]

I changed jobs in 2020, so I contributed to both a 401k plan and then a TSP plan.  I didn't hit the $19,500 limit for either plan individually, but my combined contributions to the two are significantly over that limit.  I had already filed my 2020 tax returns (in 2021) before realizing.

First, how do I go about reporting this on my federal and state returns?  (My jobs were in different states so I filed a federal and two state returns.)  Do I need to amend all 3, or can I wait until I file my 2021 taxes to report it (on all 3)?

Second, and relatedly, what do I do about the actual over-contributions?  I haven't yet spoken to my 401k holder, but the TSP plan said that I didn't technically over-contribute to them.  Does it matter from which plan I withdraw the excess?

Thanks!

[DanaB27]

Please be aware, if you do not take out the excess amount by April 15th, then you are taxed twice on the excess deferral left in the plan: Once when you contribute it, and again when you receive it as a distribution. You cannot include the excess amount in the cost of the contract even though you included it in your income.

Please contact the plan administrator where you made the last contribution and have the excess and earnings withdrawn by April 15th.

You will get two 2021 Forms 1099-R to report the excess:

• Form 1099-R with code P in box 7 has to be reported on your 2020 return. Since you filed your 2020 return already you can wait to amend the return until you receive the Form 1099-R.
• The earnings on Form 1099-R with Code 8 in box 7 should be reported in 2021.

[at87]

Hi! 

Just to follow up. I had the same problem as the original poster but just discovered it as I'm preparing my tax returns. I (obviously) won't meet the deadline for removing the excess deferral. Any advice as to what to do now? 

Should I include the excess deferral amount in my 2020 tax returns?