Invalid message stating I have excess Roth contribution (with numbers based on Roth IRA) yet this is a Roth 401k contribution and I'm within the correct limits. box 12 aa

[ebol2000]

I have confirmed with the IRS rules and I have correctly entered the amount via my W2 box 12 AA (which states 401k Roth, not Roth IRA). The message states that all of the contribution (27000) is over the limit. I'm over 50 and 27000 is the correct 401k limit. Now what? Will TurboTax take out additional taxes in error?

[dmertz · Accepted solution]

Make sure that your W-2 does not also show any amounts with codes D, E, F, S, or BB and that you have no other Form W-2 showing these or code AA.  If any of these are present, you have overcontributed.  If your W-2 shows an amount with code DD, make sure that you did not mistakenly select code D.

Also, if you are married filing jointly, make sure that your spouse's W-2, if any, is assigned in TurboTax to the correct spouse.

As you said, this is not a contribution to an IRA, so make sure that you have not entered the code-AA amount anywhere but in box 12 of TurboTax's W-2 form.

[ebol2000]

Thanks for the tips. I verified, I do have DD, but no D entry. I have no other W2 and there is no duplicate entry. My wife does not have a W2. It's really looking like a bug to me and I have no recourse but to file via another route :(

[Roy-F]

I have this same problem. TurboTax is applying the Roth IRA limit of 6500 instead of the Roth 401k limit, which is much higher. If I submit as is I will be charged a penalty each year forever.  I'm tempted to remove the Box 12 AA entry to avoid this, but I fear that might trigger an audit or some other negative action by the IRS.

[dmertz]

If TurboTax is applying the Roth IRA limit of $6,500, you have mistakenly reported the contribution as a Roth IRA contribution under Deductions & Credits.  Go back to the Traditional and Roth IRA Contributions section and remove the erroneous entry, or, if you have made no IRA contributions, delete the IRA Contributions Worksheet.