topic 403(b) Return Of Excess Contribution in Get your taxes done using TurboTax

403(b) Return Of Excess Contribution

grif — Wed, 25 Feb 2026 17:01:37 GMT

My wife's employer did not stop the 403(b) contributions at the $31,000 maximum for 2025. We did request the file a Return of Excess Contribution with the 403(b) and that they correct the W-2. They sent us the corrected W-2, and the 403(b) provider said they are sending us the check to return the Excess Contributions. We haven't received the check first, but we trust it is on its way. However, we are not confident that the 403(b) is prioritizing fixing the error on time for Tax Year 2025. We are not clear about what it is they have to do, but when we called them, they made it sounds like they were in no rush and may only make the rectification in Tax Year 2026. We'd rather have it fixed right away since we picked it up on time. Can you please advise what is the relevant process to get this error fully rectified in Tax Year 2025, and what to ask who?

Re: 403(b) Return Of Excess Contribution

DaveF1006 — Wed, 25 Feb 2026 17:24:21 GMT

Since your wife's employer already sent a corrected W-2, most of your reporting for the 2025 tax year is simple. You don’t need to wait for the physical check or the 1099-R to file. Here is how this should be handled.

You should enter the Corrected W-2 (W-2c) into your tax software exactly as it is written. The corrected W-2 should show higher "Wages, Tips, Other Compensation" (Box 1) because the excess contribution is no longer being excluded from her income. By filing this, you are paying the 2025 income tax on that excess amount now.

Do not report the "Return of Excess" yet. Corrective distributions are reported in the year they are‌ paid. Since you are receiving the check in 2026, the 403(b) provider will issue a 2026 Form 1099-R next January. Because you used the corrected W-2 for 2025, you have already paid the tax on the principal. When you get the 1099-R next year, it will have a code (likely Code P) that tells the IRS: "This money was already taxed in 2025."

One last thing. The check you receive will include the excess contribution PLUS any interest/earnings it made while in the account. You will report those earnings on next year’s tax return using that future 1099-R. When you receive the 1099R, Box 1 will report the entire distribution, but Box 2A will report the amount of the earnings/interest. Box 2A will be the taxable amount of the earnings, if there were any.

Re: 403(b) Return Of Excess Contribution

grif — Wed, 25 Feb 2026 17:28:18 GMT

Thanks, Dave. Very helpful.

Re: 403(b) Return Of Excess Contribution

DaveF1006 — Wed, 25 Feb 2026 17:36:05 GMT

Thank you for participating in this Metlife event and giving me an opportunity to answer this question. Much appreciated!!