topic How to report allocable loss from 401K excess contribution? in Retirement tax questions

How to report allocable loss from 401K excess contribution?

bettyzhoumd — Wed, 11 Feb 2026 05:36:03 GMT

I have a 1099-R for excess 401K contribution made in 2022 and I already reported $2500 as other earned income on 2022 tax return. When I got the refund check, it listed as follows,
Excess contributions: $2500
(Allocable Loss) : ($500)
Amount of Refund: $2000
Now 1099-R form only has the Gross distribution of $2000 and doesn't have $500 loss.

My question is how to repot the loss of $500? If I don't, I have paid taxes for $2500 but in fact I should only pay taxes for $2000.

Thank you for your help!

Re: How to report allocable loss from 401K excess contribution?

MarilynG1 — Thu, 21 Mar 2024 20:22:57 GMT

You can't claim the the loss of Earnings from your withdrawal of 401K Excess Contribution.

Enter Box 1 as $2500 (the amount of excess contribution) and Box 2a as $0.

Here's more info on Loss on Withdrawn Excess Contribution.

Re: How to report allocable loss from 401K excess contribution?

dmertz — Thu, 21 Mar 2024 23:22:34 GMT

MarilynG1's, reply is incorrect and provides a reference that does not apply. IRS Pub 525 says to report this loss on Schedule 1 line 8z as a negative $500 and identify it as "Loss on Excess Deferral Distribution." In TurboTax you do this by reporting it as an item of Other income.

Re: How to report allocable loss from 401K excess contribution?

bettyzhoumd — Fri, 22 Mar 2024 14:42:32 GMT

Hi,

Thank you for your reply. Can you please let me know how to report it as an item of Other income?

Re: How to report allocable loss from 401K excess contribution?

dmertz — Fri, 22 Mar 2024 18:07:33 GMT

Wages & Income -> Less Common Income -> Other reportable income

When using online TurboTax, this will require upgrading to TurboTax Deluxe.