Turbotax is telling me to populate as much as I can for a Form 1099-R for this year, classify the full overcontribution as TAXABLE, and indicate this is a 2025 Form 1099-R, which does not seem correct.
Assuming that this distribution occurred in 2025, there is nothing to report of this on your 2024 tax return. Your Roth 401(k) employee contributions for 2024 have not been excluded from box 1 of your 2024 Form W-2, so there is no income that needs to be added back on your 2024 tax return. Any investment gains that were required to be distributed along with your returned contribution will be taxable on your 2025 tax return when you receive the code 8 2025 Form 1099-R near the end of January 2026.
Thank you.
When you say "any investment gains...along with your returned contrition will be taxable", does that mean the excess contribution becomes taxable in 2025 even if it is a Roth 401K? Or are just the investment gains taxable in 2025?