Excess Roth 401k contributions

[ap_103]

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?  

[Mike9241]

(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/ 

[ap_103]

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I know I'll have to pay taxes on the withdrawn amount - any other ramifications? 

[Mike9241]

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 you should only have to pay taxes on the income withdrawn.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. 

[ap_103]

How do I enter the earnings on the excess contributions in Turbotax? 

[DanaB27]

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.

@ap_103 

[ap_103]

@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. 

[DanaB27 · Accepted solution]

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.

[ap_103]

@DanaB27 To confirm, here is the scenario that I'm running into (a little bit more complicated that expressed above):

1. In 2024, I contributed to Roth 401(k) plans at two different companies, which resulted in an over-contribution across both accounts.
2. After leaving the first company, I rolled over its Roth 401(k) into a Roth IRA around October 2024.
3. I realized I had over-contributed to the Roth 401(k) accounts on March 18, 2025. I attempted to correct this by withdrawing the excess from the second company's 401(k), but I had missed the second company's March 1, 2025 correction deadline, so that option was no longer available.
4. As a result, I requested a return of the excess contribution from the Roth IRA (which had received the rollover from the first company's Roth 401(k)).
5. On April 4, 2025, the Roth IRA custodian distributed the excess contribution along with associated earnings — including gains from both the original Roth 401(k) account and subsequent gains within the Roth IRA.

Based on the above new information, do your answers still hold regarding not having to reporting anything in my 2024 return?

[DanaB27]

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:  

• You can wait until you receive the 2025 Form 1099-R in 2026 and amend your 2024 return or
• You can report it now in your 2024 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. Then you must enter the 2025 Form 1099-R into the 2025 tax return since the withholdings are reported in the year that the tax was withheld. The 2025 code P will not add anything to your income in the 2025 tax return but the withholdings will be applied to 2025.

To enter a 2025 Form 1099-R in your 2024 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2024?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2a enter the earnings
8. Box 7 enter J and P
9. Click "Continue"
10. On "Is the IRA/SEP/SIMPLE box on this 1099-R checked?" screen answer "No, the box is blank"?
11. On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.
12. Click "Continue" after all 1099-R are entered and answer all the questions.
13. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

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.