How to file tax with form 1099-R of distribution code P in box 7 ?

Hi all,

I over contributed $5000 to my 401k account in year 2022 (due to multiple employers), I withdraw them on 04/02/2023 before the tax filing deadline, I received a check of $4750 with a loss of $250 (stock investment), from Fidelity.

I filed my tax in Turbotax by reporting $5000 as "other earned income" (probably I had to fill in this amount), afterward, I received the form 1099-SA with code P in box 7, and amount $4750 in box 1.

What should I do with this form in Turbotax, how can I claim the loss ?

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1 Best answer

Expert Alumni

Mar 18, 2024 1:11:01 PM

You can ignore the Form 1099-R with code P since you already include the excess deferral on your 2022 return.

The loss will have to be reported on your 2023 tax return:

Login to your TurboTax Account
Click "Federal" from the left side of your screen
Scroll down to "Less Common Income" and click "Show More"
Scroll down to "Miscellaneous Income, 1099-A, 1099-C" and click "Start"
Select "Other reportable income" and click "Start"
Answer "Yes" to "Any Other Taxable Income?"
Enter "Loss on Excess Deferral Distribution” and enter the loss as a negative number (-$250)

Please see Pub 525 for additional information.