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

[PeterB-2022]

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 ?

[DanaB27 · Accepted solution]

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:

1. Login to your TurboTax Account 
2. Click "Federal" from 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 reportable income" and click "Start"
6. Answer "Yes" to "Any Other Taxable Income?"
7. Enter "Loss on Excess Deferral Distribution” and enter the loss as a negative number (-$250)

Please see Pub 525 for additional information.