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Excess Distribution (over $18,500) on my 2018 401k as I switched jobs. 3/20/19 I got a Check in the mail but Fidelity said I will get a 1099-R in 2020. What do i do?

I did an over contribution and got a Excess Distribution Check (lets say $100) in March 2018. 

Fidelity said there were $0 earnings on my $100 excess deferral.  They also said I will receive a 1099-R reflecting these distributions in Jan-2020...."The excess deferral of $100 is taxable in 2018 and any earnings (in my case is $0) is taxable in 2019."

Do I add the $100 as Misc Income as I am now Prepping my taxes in April- 2018?

Also what do I do with the letter (1099-R) that Fidelity said I will receive in 2020.  I don't want to get taxed on it again.

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Level 4

Excess Distribution (over $18,500) on my 2018 401k as I switched jobs. 3/20/19 I got a Check in the mail but Fidelity said I will get a 1099-R in 2020. What do i do?

Yes, you add the $100 excess contribution to your 2018 Tax Return.  By doing this, you can ignore the Form 1099-R you receive next year.  Since there were no earnings, you will not need to report anything regarding the 2018 excess contribution on your 2019 Tax Return.

To include your overcontribution on your 2018 Tax Return, follow these steps: 

  • Open your return
  • Click on the "Federal Taxes" Tab
  • Click on the "Wages & Income" Tab
  • Click on "I'll choose what I work on"
  • Scroll down to "Less Common Income" and click "Show More"
  • Select "Miscellaneous Income" and click "Start or Update"
  • Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
  • Answer the Question "Did you receive any other wages?  Yes"
  • Click "Continue" through the questions until you get to "Any Other Earned Income"
  • Answer "Yes" to "Did you earn any other wages?"
  • Indicate "Other" as "Source" of Other Earned Income and click "Continue"
  • For the description enter "2018 Excess 401K Deferrals" and click on "Done" 

Unfortunately, if you have an excess 401(K) Contribution, you won't be able to E-file your 2018 return.  There is currently an e-filing issue within TurboTax related to excess contributions so you will need to mail in your return.  You can check out this TurboTax FAQ for more information: Excess 401(k) Contribution Preventing E-filing


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Level 4

Excess Distribution (over $18,500) on my 2018 401k as I switched jobs. 3/20/19 I got a Check in the mail but Fidelity said I will get a 1099-R in 2020. What do i do?

Yes, you add the $100 excess contribution to your 2018 Tax Return.  By doing this, you can ignore the Form 1099-R you receive next year.  Since there were no earnings, you will not need to report anything regarding the 2018 excess contribution on your 2019 Tax Return.

To include your overcontribution on your 2018 Tax Return, follow these steps: 

  • Open your return
  • Click on the "Federal Taxes" Tab
  • Click on the "Wages & Income" Tab
  • Click on "I'll choose what I work on"
  • Scroll down to "Less Common Income" and click "Show More"
  • Select "Miscellaneous Income" and click "Start or Update"
  • Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
  • Answer the Question "Did you receive any other wages?  Yes"
  • Click "Continue" through the questions until you get to "Any Other Earned Income"
  • Answer "Yes" to "Did you earn any other wages?"
  • Indicate "Other" as "Source" of Other Earned Income and click "Continue"
  • For the description enter "2018 Excess 401K Deferrals" and click on "Done" 

Unfortunately, if you have an excess 401(K) Contribution, you won't be able to E-file your 2018 return.  There is currently an e-filing issue within TurboTax related to excess contributions so you will need to mail in your return.  You can check out this TurboTax FAQ for more information: Excess 401(k) Contribution Preventing E-filing


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New Member

Excess Distribution (over $18,500) on my 2018 401k as I switched jobs. 3/20/19 I got a Check in the mail but Fidelity said I will get a 1099-R in 2020. What do i do?

Thanks for the answer....you are right now I cannot E-File as of 4/8.  Ill try to snail mail the returns.  I'll also have to find out how to get a refund on my E-File from Turbo Tax.  If anyone hears of a bug fix in the next day or two, do let me know Cheers.
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New Member

Excess Distribution (over $18,500) on my 2018 401k as I switched jobs. 3/20/19 I got a Check in the mail but Fidelity said I will get a 1099-R in 2020. What do i do?

@Rachel_W I was in a very similar situation - even almost down to the amount. I had followed the below instructions on getting the withdrawal and reporting it on my 2018 Tax return.

 

I just received the 1099-R. Do I just answer "no" to "Did you receive any 1099R forms?"