I had excess 403b contribution in 2020. I got check back refunding excess amount plus interest earned in Jan 2021. How do I address this on my 2020 return in Turbo tax?

[mventura112158]

No 1099-R in 2020.

[SamS1]

If it was a W-2 deferral, your 2020 W-2 should be corrected by adding the excess deferral back to you box 1 wages.  Check you W-2 and if this is not the case, you should get a corrected W-2.   The earnings should be reported in the tax year you received them.  

[mventura112158]

Thank you,,

So the corrected w2 would add the excess back to 2020 income, box 1, and the interest earned would be income on 2021 tax year with 1099-R  when I receive it next year?  My employer was notified December 26 2020, and funds were not distributed back to me until Jan 16, 2021.

Will I still need to report excess deferral on my 2020 return?

[SamS1]

No. If the amount was distributed to you by March 1 of the following year and your W-2 reflects the correct box 1 amount, you will be ok.  Review your box 12 coding.  The maximum contribution for a 403B is $19,500 unless you are over 50 and making catch up contributions,  You should see an E code with an amount.  This is your 403B contribution amount.  That amount should not be more than $19,500.  Yes, your earnings should be reported in the year you received unless your employer reported them to the IRS in 2020. You will want to coordinate that with your retirement plan administrator.

[mventura112158]

Thank you Sam,

 Looks like I need a corrected W2. My current W2 has excess amount in box 12 E, and my wages in box 1 don't match with my year end totals from my paycheck. I will need to contact both my employer for corrected W2 and Retirement administrator.

Thank you so much for your help!

[mventura112158]

I spoke with my employer and it looks like they will NOT be sending out corrected W2. The financial service said it was  to be taken care of by HR retirement/payroll of my employer, and employer say it needs to be addressed by the Financial institution they use for the 403b.

  Where in the turbotax program, and how do I account for the added income for the return of excess contribution plus interest earned. I will get 1099-R next January. Does it need to be added in retirement distribution with5329 form, or do I add it in misc income and describe source as  returned 2020 403b excess contribution plus interest earned ?