How to report allocable loss from 401K excess contribution?

Forum|Forum|2 years ago
March 21, 2024
4 replies
28 views

I have a 1099-R for excess 401K contribution made in 2022 and I already reported $2500 as other earned income on 2022 tax return. When I got the refund check, it listed as follows,
Excess contributions: $2500
(Allocable Loss) : ($500)
Amount of Refund: $2000
Now 1099-R form only has the Gross distribution of $2000 and doesn't have $500 loss.

My question is how to repot the loss of $500? If I don't, I have paid taxes for $2500 but in fact I should only pay taxes for $2000.

Thank you for your help!

TurboTax Online

MarilynG

Level 15

You can't claim the the loss of Earnings from your withdrawal of 401K Excess Contribution.

Enter Box 1 as $2500 (the amount of excess contribution) and Box 2a as $0.

Here's more info on Loss on Withdrawn Excess Contribution.

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dmertz

Level 15

MarilynG1's, reply is incorrect and provides a reference that does not apply. IRS Pub 525 says to report this loss on Schedule 1 line 8z as a negative $500 and identify it as "Loss on Excess Deferral Distribution." In TurboTax you do this by reporting it as an item of Other income.