Received 2019 1099R Code P -- Declared excess on 2018 return

[moneyQuestions]

In 2018, I over-deferred to a 401(k) due to having two employers that year.

I corrected the problem and had the excess returned in February 2019.

I followed TurboTax's instructions on the 2018 Federal return and declared the excess deferral amount as income for 2018 according to the instructions.

This year, I received a 1099R with a code P for the excess amount listed in both Box 1 (Gross Distribution) and Box 2a (Taxable Amount).  The amount listed on this form is greater than the 2018 excess deferral amount which I assume is earnings.   

The amount returned to me from the 401(k) company was only the excess 2018 deferral amount and did not include any earnings. I never received a check for the earnings piece.

Turbo Tax's instructions state that I can ignore the 2019 1099R since I already declared the income on the 2018 return. 

Do I still need to list the 1099R form on my 2019 return AND how do I account for the difference in the amounts, i.e. what I assume is earnings?  

[DanaB27]

You do not need to include the 1099-R with code P in your 2019 tax return but if you have already entered it you do not have to delete it since TurboTax will ignore it with the P-code.

You will need to amend your 2018 tax return to include the 1099-R if you haven't already done so by creating a 1099-R when filing the original return. If I understand correctly, you reported the excess deferral but not the earnings, therefore, you will still need to amend your 2018 tax return. Please see How do I amend a 2018 return in TurboTax?

[moneyQuestions]

And just to verify, if I have not yet entered the 2019 1099-R with the code P on the 2019 return, I do not need to and it will not be flagged as not being reported, correct?

I had already amended the 2018 tax return to adjust the reported values.

Thanks

[dmertz]

This Form 1099-R appears to be incorrect.  Only the amount of the excess deferral should have appeared on the code P Form 1099-R, which you have already reported on your 2018 tax return.  You should have received a separate code 8 2019 Form 1099-R for the earnings distributed that need to be reported on your 2019 tax return.

(Earnings should only appear on a code P Form 1099-R if the distribution was from an IRA, indicated by the IRA/SEP/SIMPLE box being marked, not a from 401(k).)

The check you received should have also have included the earnings.  Sounds like they made a real mess of this.

[macuser_22]

You can refer them to IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf

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If the distribution was for a 2018 excess deferral, your Form 1099-R should have code P in box 7. If you didn't add the ex-cess deferral amount to your wages on your 2018 tax return, you must file an amended return on Form 1040-X. If you didn't receive the distribution by April 15, 2019, you must also add it to your wages on your 2019 tax return.
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If the distribution was for the income earned on an excess deferral, your Form 1099-R should have code 8 in box 7. Add the income amount to your wages on your 2019 income tax return, regardless of when the excess deferral was made.

[jlee3]

I'm in a similar situation.

I had 2018 Excess 401K Deferrals of $845 (original contribution) and I reported this under "other earned income" per TurboTax 2018 instructions and noted "2018 Excess 401K Deferrals"

Early 2019, I received check for $766.26 due to loss.

Recently I received 2019 1099R with code P for $766.26 (1 & 2a).  Since I already reported it in 2018, do I have to include it on my 2019 tax filing?   Thanks!

[macuser_22]

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@jlee3 wrote:

I'm in a similar situation.

I had 2018 Excess 401K Deferrals of $845 (original contribution) and I reported this under "other earned income" per TurboTax 2018 instructions and noted "2018 Excess 401K Deferrals"

Early 2019, I received check for $766.26 due to loss.

Recently I received 2019 1099R with code P for $766.26 (1 & 2a).  Since I already reported it in 2018, do I have to include it on my 2019 tax filing?   Thanks!

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No.  You would only report a code 8 2019 1099-R on the 2019 tax return.  If you already reported the code P in 2018 there is nothing more to do.