Prior year 403b excess contribution and amendment question

[mventura112158]

I had excess contribution to 403b in year 2020. My employer was notified prior to year-end, but because of holidays, it was not processed until Jan 2021. No 1099R was sent. I got my excess contribution plus interest returned by check Jan 2021. When I filed taxes for year 2020, I added the principal excess contribution to schedule 1, part 1 additional income line 8 with comment "403b 2020 excess contribution return" with amount principal returned. It pulled through on my 2020 1040 filed return on line 8. There was no 1099R option on turbo tax for 2020 excess contribution in 2020 program in that section of program, so I used Miscellaneous income section and added it on line 8 as above. This year I received my 1099R with excess contribution and interest earned. I added the 1099R info where Turbo tax prompted. the Interest was added to 2021 income, and then Turbo tax said I needed to amend prior year (2020) taxes.

1. Do I need to report both the returned excess principal returned and the interest earned on 2021 return? Or just the interest?

2. Do I need to do amend 2020 return this since I already included excess contribution from 2020 in 2020 return as described above?

[DanaB27]

1. Yes, only the interest earned on the excess contribution will have to be included in your 2021 tax return. 

2. No, you do not have to amend your return since you have already included the excess in your 2020 income on your 2020 tax return.

[mventura112158]

Thank you Dana,

Do I need to report 1099R for excess   AND 1099R for interest earned on 2021 return, or just the 1099R for interest earned?

[DanaB27 · Accepted solution]

You only need to report the 1099-R for the interest earned on your 2021 tax return. The 1099-R for the excess belongs on the 2020 return but you had already reported it.

[mventura112158]

Thank you again.