topic Re: Over contribution to 401k in Retirement tax questions

Over contribution to 401k

brucetork — Mon, 09 Mar 2026 10:14:53 GMT

I over contributed ~$1,200 to my 401K in 2020 due to switching jobs mid year. I worked with HR to have that returned to me from 401K administrator and received an updated W2 for 2020 with additional $1,200 in wages that I used to file 2020 taxes. I then received a distribution from 401K of ~$1,800 ($1,200 + gains) in Feb 2021. I have now received a 2021 1099R for the full $1,800. Do I only report the ~$600 in gains even though my 1099R says $1,800? Will I have to pay any type of early withdraw penalty as well?

Re: Over contribution to 401k

MaryK4 — Sun, 17 Apr 2022 00:20:13 GMT

Since you already reported the overcontribution from your W2 in 2020, you only have to report the gain for 2021 (because you received it in 2021). The penalty for early withdrawal does apply to the interest earned.

Re: Over contribution to 401k

brucetork — Mon, 18 Apr 2022 05:37:56 GMT

@MaryK4 Thank you so much. So do I only report ~$600 even though my 1099-R says ~$1,800? How do I avoid Turbo tax calculating the 10% early withdraw penalty (The 1099-R lists a distribution code of "E" in box 7)

Re: Over contribution to 401k

brucetork — Mon, 18 Apr 2022 05:35:53 GMT

Thank you so much. So do I only report ~$600 even though my 1099-R says ~$1,800? How do I avoid Turbo tax calculating the 10% early withdraw penalty (The 1099-R lists a distribution code of "E" in box 7)