401k excess deferral after deadline.

[adyady]

my 401k excess deferral was caught after I filed my 2022 taxes and after the April 15 redistribution. Under what section on turbotax do I input the amount? I started an amendment but not sure under what section to put it on? I am not taking the actual distribution so does my plan holder need to fill out a 1099-R. The funds are staying in my 401k.

[Mike9241]

Code P indicates that the taxpayer contributed more than allowed to a 401k, IRA, etc. through payroll withholding.

Excess contributions must be included as income for the year in which the contributions were made. If the excess contributions haven’t already been claimed in that year, the return will need to be amended to include the excess distribution as income.

If the taxpayer has included the excess contribution on his or her tax return, there is no need to complete an amended return and the Form 1099-R received in the current year can be ignored.

If you know you’ll be receiving a Form 1099-R next year with a Code P and want to avoid the need to amend a return, include the data in the tax return in the current year with a Code 8. You can then ignore the Form 1099-R with the Code P when you receive it a year later. (Code 8 indicates that the amount is taxable in the tax return you are currently working on, and Code P indicates the amount is taxable in the prior tax year.)

you will pay income taxes on the excess. the bad news is you get  no tax basis for the excess so when you draw it out in the future you will again pay income taxes on it

[adyady]

Under what section on turbotax do I input the amount? I started an amendment but not sure under what section to put it on? I am not taking the actual distribution so does my plan holder need to fill out a 1099-R. The funds are staying in my 401k.

[Opus 17]

You can't remove the excess after April 15.  At this point, you must pay income tax on the excess deferral (add it back to your taxable income).  Then when you retire, you will pay tax on all your withdrawals, even though a small portion was already taxed.  That's just the way it works if you miss the deadline to withdraw the excess deferral.

If you paid tax on the excess deferral when you filed, then you don't need to do anything more.

If you did not pay tax on the excess deferral, you need to file an amended return to report the excess deferral as "other income" and pay the extra tax.  While Turbotax can tell you that you have an excess deferral, it does not automatically add it to your income so you have to do that yourself.