Overcontributed to 401(k) in 2018. I alerted the plan administrator and they sent me a check but for a different amount. How do I enter this?

[Joan2]

I changed jobs in 2018 and accidentally over-contributed to my 401(k) by $111. I alerted my plan administrator prior to filing taxes, and they sent me a check for $99, but no 1099R.

How do I go about entering this into TurboTax? Do I fill it out under miscellaneous income, or do I fill it out under Retirement Plan income? What do I put in the boxes if under Retirement Plan (111 or 99)?

[Rachel_W]

You should report the excess contributions of $111 on Line 1 of your 2018 Tax Return by following these steps in TurboTax Desktop:

• Open your return
• Click on the "Federal Taxes" Tab
• Click on the "Wages & Income" Tab
• Click on "I'll choose what I work on"
• Scroll down to "Less Common Income" and click "Show More"
• Select "Miscellaneous Income" and click "Start or Update"
• Select "Other income not already reported on a Form W-2 or Form 1099" and click on "Start"
• Answer the Question "Did you receive any other wages?  Yes"
• Click "Continue" through the questions until you get to "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" and click on "Done"

You will receive a 2019 Form 1099-R in 2020 showing the refund with a code "P" in box 7 which you can ignore if the excess deferral is reported as suggested above.  You can report the $12 loss on your corrective distribution on your 2019 Tax Return. Include the loss as a negative amount on Form 1040, line 21 and identify it as “Loss on Excess Deferral Distribution.” 

NOTE: There is currently an e-filing issue within TurboTax related to excess contributions so you will need to mail in your return.  You can check out this TurboTax FAQ for more information: Excess 401(k) Contribution Preventing E-filing.