401(k) excess deferral

[Ben_T]

I made an excess deferral into my 401k in 2023 due to one of my jobs having a variable pay schedule which makes tracking the investments very difficult. I claimed the total contribution returned ($700 principle) and ($130 interest) as "other earned income" on my 2023 return (I received both just before the April 15 deadline in 2024). This year I received two 1099-Rs (code PB for the principle) and (8B for the interest). After reading many articles I am confused as to what 1099-R (if any) I need to report on my 2024 taxes since they were BOTH reported as "other income" last year. Do I need to make an amendment to 2023 or do I report both 1099-Rs on this year's returns (2024).

Also, this happened again this year despite my best efforts to avoid it. How should I properly claim the deferrals I will receive for 2024 contributions to make my life easier when filing next year?

[DanaB27]

Code PB indicates that the the distribution was for a 2023 excess deferral to a designated Roth account. This amount shouldn't have been added to your wages on your 2023 return (Pub 525). The earnings on the excess deferral need to be reported on your 2024 return.

You will have to amend your 2023 tax return. Please see How do I amend my federal tax return for a prior year?

For the 2024 excess deferral to the designated Roth account you will report only the earnings on your 2025 tax return. You must receive the distribution of the 2024 excess deferral and earnings by April 15th to avoid double taxation.