401(k) Overcontribution

Forum|Forum|2 years ago
September 18, 2023
2 replies
5 views

Hi there,

I overcontributed to 401(k)s in 2021 due to a job change.

I received a 1099-R for '2022', and I reflected the corrective distribution/income in my already-filed 2022 tax return and I paid tax on it.

Now, I wish to amend 2021 to fully fix this issue. I believe my AGI in 2021 was too low (by the amount of the over-contribution listed on 2022's 1099-R form (note: box 2a = box 1, and box 7 = P).

Can you please explain to me how I can properly amend 2021 in Windows Desktop (step by step) and fully resolve this overcontribution to 401k issue?

Thank you so much!

Leo

Best answer by dmertz

Expert Reviewed

I think you are saying that on your filed 2021 tax return the amount of your excess 401(k) contribution (not necessarily the same as the amount in box 1 of your code-P 2022 Form 1099-R) has not already been included on Form 1040, line 1. If that interpretation is correct, the 2021 tax return needs to be amended to include the amount of the excess contribution as wages. That can be done by entering it as Miscellaneous income -> Income not already reported on a W-2 or 1099.

Since you received a code-P 2022 Form 1099-R, I assume that the corrective distribution made no later than April 15, 2022. If the amount distributed was less than the amount of the excess, on your 2022 tax return you can claim the difference as an amount of negative Miscellaneous income -> Other income identified as "Loss on Excess Deferral Distribution." If there were instead gains attributable to the excess contribution that had to be distributed along with the returned contribution, you should have also received a code-8 2022 Form 1099-R that is reportable on your 2022 tax return.

A

Anonymous_

Level 15

Contact Support if you don't get an answer here today.

How do I contact TurboTax? (intuit.com)

L

LC316Author

Level 2

Ok thanks. A text-based answer here would be much appreciated as it’s tough to step out of my job to reach customer service before their operating hours end at 5 PM.

VolvoGirl

Level 15

I'll page @dmertz he know a lot about it.

D

dmertzAnswer

Level 15

Expert Reviewed

I think you are saying that on your filed 2021 tax return the amount of your excess 401(k) contribution (not necessarily the same as the amount in box 1 of your code-P 2022 Form 1099-R) has not already been included on Form 1040, line 1. If that interpretation is correct, the 2021 tax return needs to be amended to include the amount of the excess contribution as wages. That can be done by entering it as Miscellaneous income -> Income not already reported on a W-2 or 1099.

Since you received a code-P 2022 Form 1099-R, I assume that the corrective distribution made no later than April 15, 2022. If the amount distributed was less than the amount of the excess, on your 2022 tax return you can claim the difference as an amount of negative Miscellaneous income -> Other income identified as "Loss on Excess Deferral Distribution." If there were instead gains attributable to the excess contribution that had to be distributed along with the returned contribution, you should have also received a code-8 2022 Form 1099-R that is reportable on your 2022 tax return.