to both, however, Turbo Tax states that I overcontributed only by $22 on my 401k, but doesn't include the $22 that I contributed to my 457(b). These are both included in Box 12 separately, 401(k) noted as code "D" and the 457(b) using code "G". Shouldn't my overpayment be $44, rather than $22 as indicated by Turbotax?
Yes, if these were made in 2022 and if the amounts reported for both is $27,021 each, then Turbo Tax should recognize an excess contribution for both. You may need to contact live tax support to troubleshoot this further.
Meanwhile, I included this IRS link to share good news that the contributions limits (including catchup contributions) will be raised to $30,000 for participants in 401K and and most 457 plans.
Yes, the excess deferral will be added to your 2022 wages but the returned earnings will be reported on your 2023 return. Next year you should receive two 2023 Form 1099-R, one for the returned excess deferral with code P and one for the earnings with code 8. You can ignore the 2023 Form 1099-R with code P (which belongs on your 2022 tax return) since you already reported it. But the 2023 Form 1099-R code 8 for the earnings will need to be reported on your 2023 tax return.
The warning of the overcontribution is triggered by the W-2 box 12 entry but you took corrective actions and therefore you can ignore the warning. For excess deferrals you won't get a penalty calculated and therefore you can ignore the warning.
TurboTax is unable to flag an excess elective deferral to a 457(b) because 457(b) plans allow special catch-up contributions that you may or may not have been eligible to make. If you don't qualify for any of the special catch-up contributions, yes, you also have an excess contribution to the 457(b) plan. 401(k) plans allow no similar special catch-up contributions, so TurboTax is able to detect when you have made an excess elective deferral to a 401(k) plan.
TurboTax does not automatically add detected excess contributions to income, you must do that yourself as Other income.