Excess 401k - no 1099-R allowed

[mmahomed]

Hello- I had 2 jobs in 2022 where I over-contributed a total of  $14 to my 401k. 

- First company- I left so I rolled over my earnings from the company-specific 401k to a rollover IRA  

- Second company- funds are still in 401k 

I missed the deadline for the 2nd company by a few days, so they will not process the refund. I tried calling the first company and they said they can't refund because the funds were rolled over. 

I would prefer to just pay the extra taxes on the $14  since this seems like my only option and it'll be easier than being on the phone trying to get the refund. What form do I need to fill out to (if any) to pay taxes on the $14? Or will I get sent something automatically for the 2023 tax year? 

[DanaB27 · Accepted solution]

You don't pay a penalty for an excess deferral to a 401(k) as you do with an excess IRA contribution. But if you do not take out the excess amount by April 15th, then you are taxed twice on the excess deferral left in the plan. This happens once when you contribute it (with the steps below) and again when you receive it as a distribution. You can't include the excess amount in the cost of the contract even though you included it in your income.

Please follow these steps to add the excess deferral to your wages:

1. Login to your TurboTax Account 
2. Click "Wages & Income" (under Federal) on the left side of your screen
3. Scroll  down to "Less Common Income" and click "Show More"
4. Scroll down to "Miscellaneous Income, 1099-A, 1099-C" and click "Start"
5. Select "Other income not already reported on a Form W-2 or Form 1099" and click "Start"
6. On the "Did you receive any other wages?" screen answer "Yes" and click "Continue"
7. Continue until you get to the "Any other earned income" screen, answer "Yes" and click "Continue"
8. On the "Enter Source of Other Earned income" screen select "Other" and click "Continue"
9. On the "Any Other Earned Income" screen enter "2022 Excess 401(k) Deferrals" for the description, enter the amount and click "Done".

Please see Pub 525 for additional information.