topic Excess distribution/contribution to 401k in Get your taxes done using TurboTax

Excess distribution/contribution to 401k

Random_Bunny — Sun, 04 Apr 2021 20:55:14 GMT

Hello

My spouse made excess deferral to 401K accidentally in 2019. This was from the job switch in September of 2019. We already informed the new employer in January 2020 and the employer paid back this excess contribution back in March 2020.

While filing 2019 taxes, someone advised us to not wait for a 1099-R next year that will probably require you to amend your 2019 tax return to report the excess on line 1 of your tax return - but enter it on 2019 return in TurboTax and then ignore the 2020 1099-R with a code P in box 7 when it comes. So, I did that and as part of my 2019 return, and entered this excess distribution and marked 8 in box 7.

Now, in 2021, I got official 1099-R for 2020 with that amount and instead of code P, it has 8 again on box 7.

Should I disregard/ignore this 2099-R (2020) since I already filed this last year?

Thank you

Someone said I would get 1099-R with P code in box 7- but instead we got 1099-R with with 8 in box 7.

Re: Excess distribution/contribution to 401k

MaryK4 — Sun, 04 Apr 2021 21:18:26 GMT

You would need to enter the 1099-R with ONLY the Code 8 amount for the 2020 tax return. The 8 code should be the interest earned on the excess amount while it was in the account.

The P code indicates that it was taxable income for the prior year- it should have been included in her W2 income so it gets reported in 2019.

Re: Excess distribution/contribution to 401k

Random_Bunny — Sun, 04 Apr 2021 21:33:55 GMT

Thanks Mary but I already filled this exact same info while filing 2019 taxes- in other words, I imagined that I had 1099-R with code 8 in box 7 already and created 1099-R in 2019 return and entered this amount as well as code 8 on 2019 return.

It's now that I officially received 1099-R with code 8 marked on it.

So if I fill it again for 2020, it would make me pay taxes again which I paid once last year while filing my 2019 return. Hence the question.

Re: Excess distribution/contribution to 401k

MaryK4 — Fri, 16 Apr 2021 01:37:46 GMT

You should amend the return to show the 2019 compensation income and include the 2020 interest income.

@Random_Bunny