I had excess contributions to my 2024 Roth 401(k) since I was employed in 2 different companies.
I contacted the 401k providers but they said it was too late for them to make changes to reverse this (since they have an internal deadline of Mar 15, 2024).
However, since it is still before April 15th, what options do I have to reduce my impact? I can request a distribution before April 15th (as discussed on other threads). Are there better options?
You'll need to sign in or create an account to connect with an expert.
Correct. An excess made to a Roth 401(k) is different. You do not need to add the excess to your wages since this is a Roth 401(k). Only the earnings will be taxable in the year of distribution. Therefore, you do not need to report anything on your 2024 return.
(since they have an internal deadline of Mar 15, 2024). 2024?
see this link for how to correct excess.
https://accountinginsights.org/roth-401k-over-contribution-how-to-fix-excess-contributions/
Thank you for the quick response. (It was a typo. I meant March 15, 2025)
If I just request a distribution for the excess amount before April 15, 2025, is that sufficient?
I know I'll have to pay taxes on the withdrawn amount - any other ramifications?
best before 4/15. you should only have to pay taxes on the income withdrawn. You got no tax deduction for the Roth contribution so unless your withdrawal includes some or all of an employer match none is taxable.
if you withdraw the excess after 4/15 the excess is also taxable.
How do I enter the earnings on the excess contributions in Turbotax?
You will get a 2025 Form 1099-R with code 8 in 2026 to report any earnings with the return of the excess contribution to the Roth 401(k). This will be entered next year when you work on your 2025 tax return.
@DanaB27 Thank you for the response. So, to confirm - I will not need to do anything in my 2024 return.
Based on this discussion, https://ttlc.intuit.com/community/taxes/discussion/withdrawing-excess-roth-ira-contribution/00/34346... - I thought I needed to enter a 1099-R as indicated here since after all this is excess contribution I did in 2024 (though I did receive my distribution + earning last week ie. in 2025)? This was the message I was following (though it differs from my case where I was using the Roth 401(k) - post tax money).
Please let me know when you get a chance. Thank you.
Correct. An excess made to a Roth 401(k) is different. You do not need to add the excess to your wages since this is a Roth 401(k). Only the earnings will be taxable in the year of distribution. Therefore, you do not need to report anything on your 2024 return.
@DanaB27 To confirm, here is the scenario that I'm running into (a little bit more complicated that expressed above):
Based on the above new information, do your answers still hold regarding not having to reporting anything in my 2024 return?
You should get a 2025 Form 1099-R in 2026 with codes P and J. This 1099-R will have to be included on your 2024 tax return and you have two options:
To enter a 2025 Form 1099-R in your 2024 return please follow the steps below:
Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2023" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2024.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
mpapadop
Level 1
hnk2
Level 1
x9redhill
Level 2
tinktank
New Member
Tax_right
Returning Member