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TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

 
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34 Replies
MinhT
Expert Alumni

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

Reporting excess salary deferrals (excess 401k contributions) returned to you after the end of the tax year but by April 15th of the following tax year on your 1040.  Do not create your own 1099-R for this situation.

Page 10 of IRS Pub 525 under Excess deferrals (the IRS term for 401K contribution is deferral) tells us to include the excess deferrals as income on line 7 of Form 1040 if the money was returned after the end of the tax year but by April 15th of the following tax year.  You need to report only the excess contribution, not any money generated by the investment of the excess contribution.  What you earned will be covered by a 1099-R for the following tax year and will be entered then as a normal 1099-R.

Below is how to do this in TurboTax:

  • Click on Federal in the left-hand column, then on Wages & Income
  • Under All Income, scroll down to Less Common Income
  • Select Miscellaneous Income and click Start
  • 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 through the questions till 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

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TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

Do we report the value of the excess deferral?  Or just enter the description?  If I am taxed on this amount for the 2018 tax year, will I also receive a 1099 and be taxed on this amount again when I file in 2020 for the 2019 tax year?
MinhT
Expert Alumni

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

You should enter the amount of the excess contribution. You will not be taxed again in 2019 as the 1099-R that you will receive should have code P in box 7 which means Excess contributions plus earnings/excess deferrals taxable in 2018.
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robinlm
New Member

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

I followed these instructions and was informed I still need to paper file. When I print out the paper document I do not see anywhere my note of 401k Excess Deferrals that I entered on turbotax online. Why is it not showing on the printed docs?

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

Yes. I have same issue. E-file doesn’t work and paper file doesn’t print out this is for “Excess Income Deferral “. Would Turbo Tax people please fix it ASAP before April 15,2019 Tax deadline? Thanks!

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

TurboTax has a help link "how to fix Excess Contribution to 401K" with 3 specific examples. It says Create a 1099R (with whatever information you have) even you have not received yet(will receive in 2019 for 2018 excess 401K contribution) and select code  "P" in the box(Weird though as P says for tax year 2017, which is not the case) and mark the 1099R as 2019. But my question is where will I get other info like Payer Tax ID, State Tax Id, address etc.(Those may not be same as employer stated in W2, I don't know until I get the real 1099R from my company and those needed to fill the 1099R) and Support here saying don't create 1099R for this scenario. Really confused what to do, Could Turbo tax support please clarify. Please help..!!! -Thanks.

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

Just Clarification: Changed the year I will receive 1099R is in 2020 for 2019-1099R.
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TurboTax has a help link "how to fix Excess Contribution to 401K" with 3 specific examples. It says Create a 1099R (with whatever information you have) even you have not received yet(will receive in 2020 for 2018 excess 401K contribution) and select code  "P" in the box(Weird though as P says for tax year 2017, which is not the case) and mark the 1099R as 2019. But my question is where will I get other info like Payer Tax ID, State Tax Id, address etc.(Those may not be same as employer stated in W2, I don't know until I get the real 1099R from my company and those needed to fill the 1099R) and Support here saying don't create 1099R for this scenario. Really confused what to do, Could Turbo tax support please clarify. Please help..!!! -Thanks.
ramana13
New Member

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

I am in same boat. Is turbotax working to fix this issue?

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

Hope someone in Support or user community will reply...

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

All, I have been researched other websites for answer and came across this from TaxAct.com. Please go to this link:

<a rel="nofollow" target="_blank" href="https://www.taxact.com/support/1210/2018/form-1099-r-code-p-excess-contributions-401k">https://www.t...>

"Code P indicates that the taxpayer contributed more than allowed to a 401k, IRA, etc. (through payroll withholding), and must include the excess contributions as income for the year in which the contributions were made. If the excess contributions have not already been claimed in that year, the return would need to be amended to include the excess distribution as income.

If the taxpayer has already included the excess contribution on their tax return of that year, they would not need to do an amended return, and can ignore the Form 1099-R received in the current year.

See Form 1099-R Instructions for Code P for more information.

To avoid the need to amend the return a year after the fact (if you already know you will be receiving a Form 1099-R next year with a Code P), include the data in the tax return in the current year with a Code 8. You can then ignore the Form 1099-R with the Code P when you receive it a year later. Code 8 indicates that the amount is taxable in the tax return you are currently working on, and Code P indicates the amount is taxable in the prior tax year."

I believe there are two solutions to this:

1). Report as "Miscellaneous Income" as suggested above.
2). Follow the TaxAct's advice and file a 1099-R and enter code 8 and amount on box 1a and 2 of the 1099-R you will receive from your 401K administrator. You can call them for payer ID and they should provide one to you. The actual amount may not be exactly as you have exceeded because gained and losses. File this along with your 2018 tax return as suggested above.

As far as the TurboTax printed form not including the 1099-R or mentioned anywhere about the excess return for income deferral. Actually the form is there after you filled it out. It's hidden.

1) Click on the "Forms" at the upper right hand corner right next to the state tax you own amount.
2) This will take you to all the detail paper work behind the user interface.
3) Click on the "Open Form" and expand the federal tax and search for 1099-R
4) There should be a 1099-R form you had filled out. Open it and save or print as PDF
5) Finally print the 1099-R and your final tax

All the above were just my personal opinion. Since I am not tax account. Please use it at your own risk.

Best Luck!

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

My other advice is to go to TaxAct and open an account and don't provide your actual social security number and just enter other income information to double check if you are filing it correctly. Remember if you don't file, you don't pay on this website.
This all we can do until TurboTax get back to us with real answer. If at all and before the April 15 deadline.

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

Thanks dragonfly_turbo !!!!

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

Either creating 1099R or Reporting as Excess Deferral in other section as mentioned in the review
 W2-W2G summary showing error and can't proceed to file. On the 1040 form Line1 has the modified wages(reported W2 wage + Excess Deferral, reported either of these way) but it is not removing the 12b date. So how to proceed further and e-file?

TurboTax shows excess 401K contribution for 2018. Requested Plan admin refunded excess amount and earning on Feb 2019. What should I do to file tax return for 2018?

*I mean 12b data
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