Over contribution to 401k

Forum|Forum|4 years ago
April 16, 2022
1 reply
8 views

I over contributed ~$1,200 to my 401K in 2020 due to switching jobs mid year. I worked with HR to have that returned to me from 401K administrator and received an updated W2 for 2020 with additional $1,200 in wages that I used to file 2020 taxes. I then received a distribution from 401K of ~$1,800 ($1,200 + gains) in Feb 2021. I have now received a 2021 1099R for the full $1,800. Do I only report the ~$600 in gains even though my 1099R says $1,800? Will I have to pay any type of early withdraw penalty as well?

Not A Product Question

MaryK4

Level 15

Since you already reported the overcontribution from your W2 in 2020, you only have to report the gain for 2021 (because you received it in 2021). The penalty for early withdrawal does apply to the interest earned.

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brucetorkAuthor

Level 2

@MaryK4 Thank you so much. So do I only report ~$600 even though my 1099-R says ~$1,800? How do I avoid Turbo tax calculating the 10% early withdraw penalty (The 1099-R lists a distribution code of "E" in box 7)