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98_autumn_34
Returning Member

Filing tax if you are expecting 1099R with excess contribution

Thanks.

mjsong123
Returning Member

Filing tax if you are expecting 1099R with excess contribution

I have almost identical situation this year. Made excess employee contribution of about $7361.38 to my Solo 401k in calendar year 2020. It was put into a money market fund and earned $0.20 income. Realized the mistake and asked Fidelity to return the amount $7361.58 to me in early 2021. Received the check from them. I reported the excess contribution as income on my tax return for year 2020, filed before April 2021.

 

Now I received a 1099-R from Fidelity for that amount. It has $7361.58 in both Box 1 (Gross Distribution) and Box 2a (Taxable Amount), and Code E in Box 7. When I entered it as is into TurboTax 2021, it counts the number as taxable income. But I already paid the tax last year, when I included the amount as income in my  tax return.

 

What am I supposed to do with it? @macuser_22 @J295 Please help.

MinhT1
Expert Alumni

Filing tax if you are expecting 1099R with excess contribution

Your 2021 1099-R should bear code P in box 7.

 

Please see this TurboTax Help topic.

 

You should contact your broker to obtain a corrected 1099-R.

 

As you have already reported the excess contribution in 2020, there is nothing to report in 2021 and you can ignore the 1099-R with code P.

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Filing tax if you are expecting 1099R with excess contribution

I run into the same situation this year when unexpected over contribute to my 401K account. The tax software instruction said :

1. need to notify the broker to get the refund and form 1099-R (already did)

2. enter the excess deferral in box 1 and 2a, enter code P in box 7 no matter we have received the 1099-R or not.

Is it all I need to do? 

 

Thank you

DaveF1006
Expert Alumni

Filing tax if you are expecting 1099R with excess contribution

Yes, this will be sufficient to report that you took back an excess contribution that you made in 2020.

 

@vunguyen0522 

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