topic Re: Reporting returned Roth 401k Excess contribution in Retirement tax questions

Reporting returned Roth 401k Excess contribution

NC byNY — Mon, 02 Mar 2020 17:57:44 GMT

Hi,

I filed a return of excess Roth 401k contributions for 2019 (had 2 employers) from the 40K manager and they sent me a check for the excess Roth distribution along with the earnings on the excess.

I know I will get a 1099-R for the earnings and will file that with my 2020 taxes.

On my 2019 taxes my total W-2 Roth Contribution shows that I exceeded the 2019 limits. My question is how I report that I properly had the excess ROTH (After Tax) funds returned prior to the April 15th deadline?

Re: Reporting returned Roth 401k Excess contribution

macuser_22 — Mon, 02 Mar 2020 19:34:59 GMT

Incorrect post removed.

For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf

Re: Reporting returned Roth 401k Excess contribution

dmertz — Mon, 02 Mar 2020 20:11:58 GMT

No, @macuser_22 . The excess is not includible as miscellaneous income because Roth contributions are not excluded from box 1 of the W-2 in the first place. At most, all that is needed with the 2019 tax return is an explanation statement indicating that the excess was distributed before April 15, 2020.

Re: Reporting returned Roth 401k Excess contribution

NC byNY — Mon, 02 Mar 2020 19:34:27 GMT

You are correct in assuming I received the distribution in 2020 for 2019 excess contribution. Plan would not do the refund until I provided both W2's showing the excess.

Quick clarification question - The excess amount however was returned from Roth funds (after tax) so if I add that amount to my 2019 Line 1 would I not be paying tax again on that amount because line one already reflects that amount? Thanks in advance for your insightful discussion.

Re: Reporting returned Roth 401k Excess contribution

macuser_22 — Mon, 02 Mar 2020 19:36:44 GMT

@dmertz Good point! I deleted my post @NC byNY disregard it. The earnings will still be taxable in 2020.

Re: Reporting returned Roth 401k Excess contribution

NC byNY — Mon, 02 Mar 2020 19:54:15 GMT

Thank you for the insightful discussion!