Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 2
posted Mar 22, 2025 2:22:46 PM

How do I address return of excess Roth 401(k) contributions?

Hello,

 

I am under 50 and worked for two employers in 2024. I ended up making $23,433 of Roth 401(k) contributions (total) between the two employers in 2024. I realized this in early 2025, contacted the plan administrator for one of the employers, and received a $433 check for the excess contribution and a $13.32 check for the earnings on the $433 in March 2025.

 

I also received a letter from the plan administrator stating that I will receive two 1099-R form in Jan' 2026:

 

  • I understand that one of the forms will be for the $13.32 earnings to be reported as taxable income for 2025. No questions there.
  • I think that the other one would show that I took out the $433 excess contribution. What do I do with this form? Do I need to amend my 2024 return? The $433 was a Roth 401(k) contribution and already included in taxable income for 2024. Should I ignore this 1099-R? Do I need to do anything now (before 4/15/25)?

Thank you for your help!

0 4 2349
1 Best answer
Expert Alumni
Mar 24, 2025 1:17:27 PM

Yes, you will enter the Form 1099-R with code 8 reporting the earnings. 

 

You can ignore the Form 1099-R with code BP reporting the returned excess contribution. Just keep it for your records.

4 Replies
Expert Alumni
Mar 22, 2025 2:48:11 PM

No, you do not have to report anything on your 2024 tax return since you removed the excess contribution before the due date for the tax return.  

Level 2
Mar 22, 2025 3:09:40 PM

Thank you for clarifying that. Very helpful!

 

One quick follow-up. For the two 1099-Rs I am expecting to receive in Jan' 26:

 

  • The 1099-R Showing the $13.32 in Earnings: I understand that I will include the earnings as taxable income for 2025 on my 2025 return.
  • The 1099-R Showing Return of the $433.00 Excess Contributions: Should I enter any info from this 1099-R on my 2025 return? Or, just ignore it?

Thank you.

Expert Alumni
Mar 24, 2025 1:17:27 PM

Yes, you will enter the Form 1099-R with code 8 reporting the earnings. 

 

You can ignore the Form 1099-R with code BP reporting the returned excess contribution. Just keep it for your records.

Level 2
Mar 24, 2025 5:55:03 PM

Thank you! Good to get this confirmation from an expert. Much appreciated.