401k return of excess

[Kerala]

Hi, I got a 401k return of excess after plan failed discrimination test. Can you tell me how do I report federal and state taxes withheld on it and report the income in turbotax desktop edition, 2025. Thank you

[DoninGA]

If you received a withdrawal from the 401(k) account in 2025 you would have received a Form 10990R.  On the form would be the withdrawal amount and any federal and state income taxes paid.

Do you have the Form 1099-R?

[Kerala]

No 1099 R. Just account distribution statement w the distribution, federal and state withholding.

[DoninGA]

OK...then see this TurboTax support FAQ for information on an excess deferral - https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-1099-r/401-k-excess-deferral/L9XUjV...

@dmertz Could you assist on this excess deferral issue?

[dmertz]

https://www.irs.gov/retirement-plans/401k-plan-fix-it-guide-the-plan-failed-the-401k-adp-and-acp-non...

This appears to be a correction described in Method 2 of the IRS fix-it guide.  Because you received no 2025 Form 1099-R that reports this corrective distribution, it seems that this distribution occurred in 2026, will be reported on a 2026 Form 1099-R and will be reportable on your 2026 tax return.  This would result in the tax withholding being credited on your 2026 federal and state tax returns.

This is not an employee excess deferral discussed in the TurboTax reference that DoninGA provided.  Distributions to correct an ADP or ACP failures are handled differently.

[Kerala]

Yes. So my company failed the test and I got part of my contribution returned in March 2025 from previous years contributions. I am supposed to report it as income on 2025s tax. Do you know how i can do that and report the federal and state taxes withheld on it in turbotax. Ty for your help. 

[dmertz]

The plan is required to have issued a 2025 Form 1099-R for this corrective distribution that occurred in 2025.  Contact the plan to obtain the missing form.

[Kerala]

I have. They are mailing it. Ty. Can you link me the instructions to enter the info.