Overcontribution to Roth 401K

[jumattb29]

I'm getting some conflicting information on how to fix my overcontribution.  For 2019, I contributed only to a Roth 401K.  Due to an employment change, I ended up overcontributing by $102.45 for the year into Fidelity.  Fidelity had me send an ROE form requesting the amount get returned.  Since this is a Roth 401K, am I supposed to wait for a new W2?  I was under the impression that since it was a Roth, I wouldnt need a new W2.  Should I expect additional forms or modified forms before filing for return for 2019?  Do I claim the returned interest in 2019 tax return or wait for 2020 return?  Thanks!

[ReginaM]

No, I would not expect a corrected W-2 for over-paying your IRA.   However, you should receive a statement from Fidelity showing your correct contributions for the year.   I would wait for that.  

You have until the tax filing deadline (April 15th)  to make your Roth IRA contributions for the prior year, it sounds like Fidelity is trying to correct your contributions before this deadline.

If it is not corrected, you could be penalized and be charged the 6% penalty if you contribute more than the allowed contribution amount of $6,000 ($7,000 if 50 or older) split between traditional IRA's and Roth IRA's.    

To enter Roth IRA contributions in TurboTax:

1. Federal Taxes,
2. Deductions & Credits,
3. Retirement & Investments,
4. Traditional & Roth IRA contribution.

A Roth IRA contribution does not actually go on a tax return, but you should enter it anyway to:

1) Tell you if your income qualifies you for a contribution and warn you if it does not.
2) Check if your income exceeds the limit to contribute to a Roth.
3) Track your contribution year-to-year if you use TurboTax every year.

4) Add the Retirement Savers Credit if you qualify.

5) Track of your contributions through the years, and if you overpaid, or had pay back anything, it will keep track of it for you.

[jumattb29]

Thank you for your response.  The account in question is a Roth 401K and not a Roth IRA.  Does this apply for Roth 401Ks as well?

[dmertz · Accepted solution]

You won't receive a corrected Form W-2.  Next year you'll receive one or two 2020 Forms 1099-R related to the return of excess contribution, and any earnings required to be distributed with your returned contribution will be taxable on your 2020 tax return.