2022 Excess Contribution Return - Amended Return Help Needed

Forum|Forum|2 years ago
July 31, 2023
2 replies
26 views

Hi TurboTax experts!

My wife and I, filing jointly, have run into an issue on excess contribution. Details are:

1. Wife was employed in 2022, retired Oct. 2022.

2. She was contributing to a 401(k) plan.

3. After retirement, she rolled over (100 %) the 401(k) to a Traditional IRA.

4. We filed our 2022 Joint Return in March, 2023. Return accepted, due taxes paid. Same for State Taxes.

5. In May 2023, we received notification that there was an excess contribution to the 401(k), which is now the IRa funds.

6. Excess amount was $2900.98 and earnings on that were $50.19 - total $2,951.17.

7. Requested this excess contribution be distributed - received July, 2023.

8. Are being told 1099-R will be issued in Jan 2024.

9. But we want to Amend the 2022 Returns by Oct. 15, 2023 which is the automatic extension - so that we are done with this issue.

Q1. What do I do without this 1099-R to amend the tax return for the amounts above?

Q2. Can i generate my own 1099-R? If so, what codes do I use/input?

Q3. Any other tips/pointers?

Any help from the experts will be greatly appreciated.

Filing was done online in TurboTax.

MANY THANKS!

AMS

guywong

Level 6

Your hunch is correct. You should amend your 2022 tax return. The 1099-R you will receive from the 401(k) administrator in Jan 2024 will have a Distribution Code P in Box 7 (Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2022.) See page 7 of the 2023 1099-R, linked below.

https://www.irs.gov/pub/irs-pdf/f1099r.pdf

I found this answer to an earlier question. It was on a 2018 excess contribution with a 2019 1099-R with a Distribution Code P

https://ttlc.intuit.com/community/taxes/discussion/1099-r-code-p-what-to-do/00/1442903

macuser_22

Level 15

A code P on a 2019 1099-R means it was a 2018 excess returned in 2019. The excess must be reported as returned wages on an amended 2018 tax return. Entering the code P in to the 2018 software will ask if it is a 2018 or 2019 1099-R - say 2019 and the box 1 amount will be added to the 2018 1040 line 1 as wages.

AMS2022Author

Level 2

Thanks for taking the trouble to respond.

I am wanting to file my Amended Return before Oct. 15, 2023 and so would prefer to not wait until the 1099-R is issued in Jan. 2024.

So my hope was to get enough help and clarity as to how to go back into Turbotax, Amend my 2022 Return by adding this Excess Contribution just distributed and pay the additional tax and be done with it.

I am not clear on what all i need to in Turbotax, how to “self-generate” the 1099-R (with the right inputs for each box entry) and go about finishing the Amended Return.

I will hope there will be additional input to help me get those answers.

Thanks for your input!

guywong

Level 6

You don't need an actual copy of the 1099-R as you don't need to attach it to your amended 1040X tax return. So I don't see why you couldn't amend the 2022 tax return now as you should know the employer name, address, ID#, amount, distribution code, etc on the 1099-R. So just enter them into TurboTax. Based on what you wrote in the OP, I'm pretty sure your wife's 2023 Form 1099-R will have a P Distribution Code in Box 7. But you should contact HR at her former employer to make sure that's the case.

I'm no TurboTax expert. Here's a previous answer to a similar question:

https://ttlc.intuit.com/community/after-you-file/discussion/where-do-i-enter-1099-r-code-p-when-amending-a-prior-year-tax-return/00/533365

A 2018 1099-R with a code "P" in box 7 is taxable in 2017, the year the contribution was made, not 2018.

You must amend 2017 to report it. The 2017 1099-R interview will say that code P means "Return of contribution taxable in 2016", but the interview will ask if this it a 2017 1099-R or a 2018 1099-R. Say 2018 and the "taxable in 2016" becomes "taxable in 2017" (the year advances by 1 each year).

It is not reported in 2018 unless there were earnings in which case the earnings should be reported on a separate 2018 1099-R with a code 8 on box 7 to be reported in the year the earnings were returned.

The end result is that you will increase taxable wages by the amount of the excess 401(k) DEFERRAL in the amended 2022 tax return on Line 1 of the 1040. The earnings are taxed in 2023.

https://www.irs.gov/instructions/i1099r#en_US_2023_publink[phone number removed]

Excess deferrals.

Excess deferrals under section 402(g) can occur in section 401(k) plans, section 403(b) plans, or SARSEPs. If distributed by April 15 of the year following the year of deferral, the excess is taxable to the participant in the year of deferral (other than designated Roth contributions), but the earnings are taxable in the year distributed.