ATX Entry Help - Excess 401K Contribution

[BulldogTom]

I am not entering this yet, just asking in advance so I don't screw this up.   Still waiting for corrected W2.

TP had an excess 401K contribution due to having changed jobs mid-year.   I had him contact the trustee and he got the paperwork back indicating the excess was removed including earnings on the excess.   I know he will get a 1099R next year.   

2024 - My understanding is the Employer is REQUIRED to adjust the W2 and issue a corrected form to account for the excess withdrawn, even though they are the second employer of the year.  When the corrected W2 comes in, income for 2024 will be accurate and there is no additional action or forms for 2024?   Correct?

2025 - he will get a 1099R coded for excess withdrawn before due date of return, the $22 of earnings will be the only part taxable but will not be subject to the 10% early withdrawal penalty?   Form 5329 will sort this all out?

Am I missing anything.   I don't think I have had one of these in a decade or so.

Tom
Longview, TX

[BulldogTom]

More info - employer is not going to correct the W2.   They say it is not their error.   

My thought is to put the difference into other Income and at least when the IRS asks about it, I can document that the withdrawal happened and the income got back on the return.   

Will this fly?

Tom
Longview, TX

[Lee B]

When you enter both W 2s, what does your tax software do with the excess 401 k contribution?

[BulldogTom]

I have not yet.   I was waiting for the corrected W2.

Tom
Longview, TX

[jklcpa]

Excess contribution is shown on line 1h of the 1040.

[Slippery Pencil]

Off the top of my head, the employer is correct that it's not their error and they don't issue a corrected W2.  If it was an excess from one employer, then it would be the employer's error and their requirement to correct.  The excess gets added back to wages, which off the top of me head is now line 1 (use to be line 7).

[jklcpa]

Line 1h from the 1040 instructions: