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nicholas12211
New Member

Same question that someone else posted--trying to correct a 2018 excess deferral to a 401(k) when Turbotax's software's fix refers to it as 2017 income instead of 2018

Have been on hold 40 minutes waiting for a TurboTax specialist.  As someone else posted:

"Steps to Take to Remove an Excess Salary Deferral", on step 4 it indicates I should:

4. Report the excess deferral on your 2018 return in the Income section for Retirement Plans and Social Security whether or not you received a Form 1099-R before you file your return. Enter as much information as you can. Report the excess deferral amount in boxes 1 and 2a, and use code P in box 7. Indicate that this is a 2019 Form 1099-R.

However, code P indicates that the excess contributions were for 2017. Should I use code 8 in box 7 instead? If not, how do I indicate that this a 2019 1099-R substitute form?"

I have the exact same question.  I tried the alternative offered to the other person to add it to line 1 income by using the "miscellaneous income" section, but then TurboTax kept telling me to correct the amount listed in my W-2s since it was over the maximum amount.  Without doing that, it wouldn't let me e-file.  Since the amount shown is correct, I don't want to change it although I recognize that by adding the miscellaneous income I've corrected the underlying problem.

7 Replies
MinhT
Expert Alumni

Same question that someone else posted--trying to correct a 2018 excess deferral to a 401(k) when Turbotax's software's fix refers to it as 2017 income instead of 2018

You should request a return of the excess contributions by April 15. 2019 to avoid the excise tax of 6%.

Page 10 of IRS Pub 525 under Excess deferrals (the IRS term for 401(k) contribution is deferral) tells us to include the excess deferrals as income on line 1 of Form 1040 if the money was returned after the end of the tax year but by April 15th of the following tax year.  You need to report only the excess contribution, not any money generated by the investment of the excess contribution.  What you earned will be covered by a 1099-R for the following tax year and will be entered then as a normal 1099-R.

Below is how to do this in TurboTax:

  • Click on Federal in the left-hand column, then on Wages & Income
  • Under All Income, scroll down to Less Common Income
  • Select Miscellaneous Income and click Start
  • Select Other income not already reported on a Form W-2 or Form 1099 and click on Start
  • Answer the question "Did you receive any other wages?  Yes
  • Click through the questions till you get to Any Other Earned Income
  • Answer Yes to Did you earn any other wages?
  • Indicate Other as Source of Other Earned Income and click Continue
  • For the description enter "2018 Excess 401K Deferrals" and click on Done

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nicholas12211
New Member

Same question that someone else posted--trying to correct a 2018 excess deferral to a 401(k) when Turbotax's software's fix refers to it as 2017 income instead of 2018

As I mentioned in the last paragraph of my question, when I tried that, TT wouldn't let me efile without changing the reported 401(k) contribution amount on my W-2s to the allowed maximum of $24,500.  Since that would then not match my W-2s in an audit, I am leery of making that change.
MinhT
Expert Alumni

Same question that someone else posted--trying to correct a 2018 excess deferral to a 401(k) when Turbotax's software's fix refers to it as 2017 income instead of 2018

You should not need to change the amount reported on your W-2. You just need to report the excess as wages. TurboTax works fine with the above procedure.
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nicholas12211
New Member

Same question that someone else posted--trying to correct a 2018 excess deferral to a 401(k) when Turbotax's software's fix refers to it as 2017 income instead of 2018

TurboTax did not work fine with this procedure for me, as I have explained.
MinhT
Expert Alumni

Same question that someone else posted--trying to correct a 2018 excess deferral to a 401(k) when Turbotax's software's fix refers to it as 2017 income instead of 2018

I'm checking this issue and have reported it to TurboTax. I will get back to you as soon as I have a better answer.
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nicholas12211
New Member

Same question that someone else posted--trying to correct a 2018 excess deferral to a 401(k) when Turbotax's software's fix refers to it as 2017 income instead of 2018

Thank you.  I have spent a total of 3 1/2 hours on the phone with TT advisors tonight and still cannot complete my return because it insists on me changing the W-2 reported 401(k) contribution amount because it's over the maximum amount.  I've reported the excess deferral on my return so it's now properly included in my 2018 income, but that doesn't change the fact that the W-2 amount is accurate as originally stated.
MinhT
Expert Alumni

Same question that someone else posted--trying to correct a 2018 excess deferral to a 401(k) when Turbotax's software's fix refers to it as 2017 income instead of 2018

Unfortunately, you have to file by mail.
Please see this TurboTax FAQ: <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/7327357">https://ttlc.intuit.com/replies/7327357</a>
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