What if I have a 401(k) excess deferral?

1. Sign in to TurboTax, scroll down, and open Your tax returns & documents.
2. Select 2023, then Amend (change) return, then Amend using TurboTax Online.
3. On the OK, let's get a kickstart on your 2023 amended return screen, select Adding or updating a tax form then Continue.
4. On the Which one of these forms do you need to add to your return? screen, select 1099-R then Continue.
5. Continue through the screens and answer all the questions.

If you haven’t filed your 2023 return yet and want to report a 2023 excess 401(k) deferral that was distributed in 2024:

1. Sign in to TurboTax and open or continue your return.
2. Go to Wages & Income under Federal.
3. Under Less Common Income, select Start or Revisit next to Miscellaneous Income, 1099-A, 1099-C.
4. Select Start next to Other income not already reported on a Form W-2 or Form 1099.
5. Answer Yes to Did you receive any other wages?, then Continue.
6. Continue until you get to the Any other earned income screen. Answer Yes and select Continue.
7. On the Enter Source of Other Earned income screen, select Other and Continue.
8. On the Any Other Earned Income screen, enter 2023 Excess 401(k) Deferrals for the description, enter the amount, and select Done.

For Tax Year 2024:

Your 2024 Form 1099-R form will be issued reporting the excess 2023 401(k) deferral you received as a distribution in 2024.

• You can ignore a Form 1099-R with code P in box 7 if you reported the excess as described above in 2023.
• But, the earnings on Form 1099-R with code 8 in box 7 should be reported in 2024.

If you don't take out the excess amount by the due date, you're taxed twice on the excess deferral left in the plan. This happens once when you contribute it and again when you receive it as a distribution. You can't include the excess amount in the cost of the contract even though you included it in your income.