I received 1099-R for the corrective distribution of 401k excess amount in 2016. 1099-R calendar year is 2017. Shall I include it next year tax return or this year?

[macuser_22]

It actually says 2017 on the 1099-R?
What code is in box 7?

[zhujianjun1]

I got two 1099-R. One is P, and the other is 8 which is for the current year.  The second one is the investment gain from the excess amount.  Both say 2017 as the calendar year.

[macuser_22 · Accepted solution]

Enter the 1099-R with the code P into your 2016 tax return.  When it asks what year the 1099-R is for - say 2017.  That will add the box 1 excessive deferral to your 1040 line 7 income.  A 2017 code P means that it is taxable in 2016 - the year of the excess deferral.

The one with a code 8 is reporting the earnings that are taxable in the year withdrawn (2017).  Hold on to that and enter it next year when you do your 2017 tax return since it is a 2017 1099-R taxable in 2017.

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

[zhujianjun1]

In the TurboTax, Box 7 P is return of contribution taxable in 2015.  I don't see a choice for taxable in 2016.  Does it mean I shall enter 1099-R with P next year?  I don't want to confuse IRS when next year comes, they might be looking for this 1099-R with "p" reported by Charles Schwab.

[macuser_22]

As stated above.  Code P in 2016 is for 2015.  Continue and then it will ask on another screen if this is a 2016 or 2017 1099-R.  Choose 2017, then code P will mean 2016 and not 2015.  

You won't confuse the IRS next year since a 1099-R with a code P does not go on your 2017 tax return (unless there is box 4 or box 12 tax withheld - not common - then in addition to entering the return of contribution on the 2016 tax return, the withholding paid in 2017, it must also go on the 2017 tax return.  The code P will do nothing on a 2017 tax return, but any box 4 or box 12 withholding will be added to all other withholding.)  they will look on your 2016 tax return to find it and it will be there.

[tchelavr]

I have a similar situation but I had federal and state tax withheld. Turbo tax is not adding the federal tax withheld to the 2016 taxes.

[macuser_22]

@tchelavr - Do you have a 1099-R or are you trying to enter as above?   

If the excess was returned in 2017 then the tax withholding must be reported on your 2017 tax return next year, only the 2016 excess is reported for 2016.

[tchelavr]

I don't have a 1099 R. The excess was returned in February 2017 with taxes withheld. I agree with you. I will add the excess to the 2016 wages and turbo tax will probably add the taxes to the 2017 return when I enter the form again.

[macuser_22]

Correct.