How do I enter excess 401K deferrals in TurboTax Deluxe? (about $20 over the $18K limit—getting distributed before April 15, but 1099R won’t come until Jan 2019)

ringersa — Tue, 04 Jun 2019 19:54:04 GMT

You must include the excess deferral in your income for t...

MaryK1 — Tue, 04 Jun 2019 19:54:05 GMT

You must include the excess deferral in your income for the year of the deferral unless you have an excess deferral of a designated Roth contribution. File Form 1040 to add the excess deferral amount to your wages on line 7. Do not use Form 1040A or Form 1040EZ to report excess deferral amounts

If you take out the excess after the year of the deferral and you receive the corrective distribution by April 15 of the following year, do not include it in income again in the year you receive it. If you receive it later, you must include it in income in both the year of the deferral and the year you receive it. Any income on the excess deferral taken out is

taxable in the tax year in which you take it out. If you take out part of the excess deferral and the income on it, allocate the distribution proportionately between the excess deferral and the income.

You should receive a Form 1099-R for the year in which the excess deferral is distributed to you. Use the following rules to report a corrective distribution shown on Form 1099-R for 2017.If the distribution was for a 2017 excess

deferral, your Form 1099-R should have the code “8” in box 7. Add the excess deferral amount to your wages on your 2017 tax return.

Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. Include the loss as a negative amount on Form 1040, line 21 and identify it as “Loss on Excess Deferral Distribution.” Even though a corrective distribution of excess deferrals is reported on Form 1099-R, it is not otherwise treated as a distribution from the plan. It cannot be rolled over into another plan, and it is not subject to the additional tax on early distributions.

How to do this in TurboTax:

The easiest way to get to the interview questions is to type "excess salary deferrals" in the search box and click on Jump to Excess Salary Deferrals

You can also get to the same place by going to the Miscellaneous Income, 1099-A, 1099-C line at the bottom of the Wages & Income screen .

On the Other Wages Received screen click Yes to the question:
Did you receive any other wages?
Click Continue.

On the Wages Earned as a Household Employee screen, Enter nothing and Click Continue.

On the Sick or Disability screen, Enter nothing and Click Continue.

On the Any Other Earned Income screen click Yes to the question:
Did you earn any other wages?
Click Continue.

On the Enter Source of Other Earned Income screen click Other and Click Continue.

On this Any Other Earned Income screen, enter a Description such as "2017 Excess 401K Deferrals" Enter the amount returned to you and click Done.

Re: You must include the excess deferral in your income for t...

mallik — Tue, 21 Apr 2020 16:42:05 GMT

When I enter negative amount as described above, Turbotax is not allowing me to eFile my Federal tax returns. It says I need to fix the return and 'Wages, Salaries & Tips worksheet: TP other earned inc shouldn't be less than zero." Please help!!

Re: How do I enter excess 401K deferrals in TurboTax Deluxe? (about $20 over the $18K limit—getting distributed before April 15, but 1099R won’t come until Jan 2019)

user314 — Sat, 27 Feb 2021 02:47:50 GMT

Good evening. I entered the loss on the excess deferral to my Roth 401k by putting it as a negative number in other taxable income. Now I'm at the last step of filing my taxes with TurboTax but when I click "transmit returns now" I get the "check this entry" error and bring me to the "other earned income" page of my return showing the loss and it says "wages, salaries, & tips worksheet: TP other earned inc shouldn't be less than zero". It seems like it won't let me proceed until I remove the negative number. What should I do?

topic You must include the excess deferral in your income for t... in Retirement tax questions

How do I enter excess 401K deferrals in TurboTax Deluxe? (about $20 over the $18K limit—getting distributed before April 15, but 1099R won’t come until Jan 2019)

You must include the excess deferral in your income for t...

Re: You must include the excess deferral in your income for t...

Re: How do I enter excess 401K deferrals in TurboTax Deluxe? (about $20 over the $18K limit—getting distributed before April 15, but 1099R won’t come until Jan 2019)