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jphell
New Member

How do I report the return of an over contribution to a 401K plan in Turbotax? I overpaid by $541 but I know the amount of the actual check $470

I overpaid by $541 but I know the amount of the actual check and need to know if that is that is the figure I should use (lower because of market conditions) or the actual amount of the overpayment? 

The below was helpful but doesn't help me with the amount I should report 

You should report the refund of the excess contributions on Line 1 of your 2018 Tax Return by following these steps: 

·          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

You will receive a 2019 Form 1099-R in 2020 showing the refund with a code "P" in box 7 which you can ignore if the excess deferral is reported as suggested above.  However, the earnings will be reported on a separate 2019 Form 1099-R with a Code "8" in Box 7 that should be reported on your 2019 tax return.

By: TurboTaxRachelW

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1 Reply
Rachel_W
Expert Alumni

How do I report the return of an over contribution to a 401K plan in Turbotax? I overpaid by $541 but I know the amount of the actual check $470

You should include the full amount of your over-contribution, $541, as wages on your 2018 Tax Return.

You can report the $79 loss from your corrective distribution as a negative amount on Line 21 of Schedule 3 on your Form 1040.  You should identify it as “Loss on Excess Deferral Distribution.” This loss should be taken in the year that you received the corrective distribution.

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