No, you should not change Box 12a of your W2 to reflect the change. You should input your W2 into TurboTax exactly how it appears, with the excess deferral to your 401(k).
If you overcontributed to your 401(k) in 2018 and the excess was distributed in 2019, you need to include the excess contribution to your 401(K) on line 1 of your 2018 Form 1040 by following these steps:
- Login to your return
- Click "Take Me To My Return"
- Click "Federal" on the left side of your screen
- Scroll down to "Less Common Income" (You may need to click "Show All" to get this option to pop up)
- Select "Miscellaneous Income, 1099-A, 1099-C" and click "Start or Update"
- Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
- Answer "Yes" to the Question "Did you receive any other wages?"
- Click "Continue" through the questions until you get to the section "Any Other Earned Income"
- Answer "Yes" to "Did you earn any other wages?"
- Indicate "Other" as Source of Other Earned Income and click "Continue"
- For the description enter "2018 Excess 401K Deferrals", enter the amount, and click on "Done"
NOTE: You will receive a 2019 Form 1099-R with a code "P" in box 7 which you can ignore if the excess deferral is reported as suggested above. However, the earnings (if any) will be reported on a separate 2019 Form 1099-R with a Code "8" in Box 7 that should be reported on your 2019 tax return.
Please comment below if you need further clarification.
