I have excess salary deferral from over contributing to 401K. The amount returned to me by my financial institution is less than my contribution.

[radkan]

I'm filing taxes for 2022 and 2022 is the year when I made excess contribution due to a job change. I contacted my financial institution in March, 2023 and got it corrected. My financial institution returned to me amount which is less than my contribution, it looks like they deduct 10% as early withdrawal fee already. So my question is how do I report this on 1099-R as I will only get it next year. What amount do I report in boxes 1 and 2a? Should it be the amount for which I received the check? or should it be original amount of excess contributions? At this point I don't even know if there's any earnings. Would I be able to claim this 10% deduction already done by my financial institution? If the amounts are very different on 1099-R next year, how do I make the corrections?

[MarilynG1]

If you received a 2022 401(k) excess deferral distribution in 2023, you'll receive a 2023 Form 1099-R with a distribution Code P in box 7; however, it must be included on your 2022 tax return. You have two options to do that:

1. Wait until next year when you receive the 2023 Form 1099-R and amend your 2022 tax return
2. Report it now on your 2022 return and ignore the 2023 1099-R when it comes next year
   • If your 2023 Form 1099-R has an amount in box 4, Federal tax withholding and/or box 14 State withholding, then you must enter it on your 2023 tax return. The 2023 Code P won’t affect your return, but the withholdings will be applied to 2023.

Click this link for more info on Excess 401K Contribution. 

@radkan