hi! I checked the forums and didn't find a similar question that pertains to my situation, so I figured I'd ask here:
My spouse overcontributed to her 401k in 2018 due to a job change and miscalculation. We have notified her employer and they have sent a request to Fidelity to return the excess, which will come in the form of a refund check.
In order to properly process this in TT so I don't get double taxed on the 401k excess deferral, what documents do I need? Do I need an amended 2018 W2? Do I need a new 2018 1099R to pay tax in 2018 on the excess deferral and a 2019 1099R for next years filings to pay tax on the interest/earnings?
If your spouse overcontributed to a 401(k) in 2018 and the excess will be distributed by 4/15/2019, you need to include the excess contribution to your 401(K) on line 1 of your 2018 Form 1040. (See instructions below)
Follow these steps to report the excess 401(K) contribution on your 2018 Tax Return:
You will receive a Form 1099-R in 2019 with a code P in box 7 which you can ignore if the excess deferral is reported as suggested above. However, the earnings (if any) will be reported on a separate 2019 Form 1099-R with a Code "8" in Box 7 that should be reported on your 2019 tax return.
Please comment below if you need further clarification.