How do I correct excess 401(k) contributions?
Contact your plan administrator and have them distribute the excess contributions and earnings on the excess contributions to you. You'll want to do this by April 15, 2026 if possible to avoid the excess contribution being taxed on your 2026 tax return.
If you corrected your excess contribution early enough, you'll receive a 1099-R in early 2026 with code "8". You'll enter this 1099-R on your 2025 tax return. Only the excess contribution (the taxable amount attributable to the deferral year) should be included on your 2025 return. The earnings on that corrective distribution are taxable in the year the distribution is actually made and should not be reported on your 2025 return. They will be reported in the year the payer issues a separate 1099-R for the earnings (often with code "P" in the year of distribution).
Usually, though, your plan administrator will send you a 1099-R with code "P" in 2027. This will require you to amend your 2025 tax return to include this excess 401(k) contribution.
Report 401(k) Excess Deferral on your 2025 tax return before April 15, 2026.
If you've talked to your plan administrator and know you'll be receiving a 1099-R with code "P" in 2027 you could do the following to include the excess 401(k) contribution on your 2025 tax return to avoid having to amend your 2025 tax return later:
Example of how to report an excess 401(k) deferral on your 2025 return.
What if I contributed more to my 401(k) than is allowed?
If you corrected your excess contribution early enough, you'll receive a 1099-R in early 2026 with code "8". You'll enter this 1099-R on your 2025 tax return. Only the excess contribution (the taxable amount attributable to the deferral year) should be included on your 2025 return. The earnings on that corrective distribution are taxable in the year the distribution is actually made and should not be reported on your 2025 return. They will be reported in the year the payer issues a separate 1099-R for the earnings (often with code "P" in the year of distribution).
Usually, though, your plan administrator will send you a 1099-R with code "P" in 2027. This will require you to amend your 2025 tax return to include this excess 401(k) contribution.
Report 401(k) Excess Deferral on your 2025 tax return before April 15, 2026.
If you've talked to your plan administrator and know you'll be receiving a 1099-R with code "P" in 2027 you could do the following to include the excess 401(k) contribution on your 2025 tax return to avoid having to amend your 2025 tax return later:
- Get the taxable amount distributed from your plan administrator. This is the amount of your excess contributions. (Roth contributions would already be included in your income so they shouldn't be included in the taxable amount here)
- Enter a Form 1099-R on the Your Retirement Income (Form 1099-R) screen in the retirement income section.
- Choose Form 1099-R, 401(k)/pensions/IRA distribution on the Type of 1099-R screen.
- Choose Enter it Manually on 1099-R Entry Method screen.
- For Box 1 enter the taxable amount (amount of your excess contribution) from your plan administrator
- For Box 2a enter the taxable amount from your plan administrator
- For Box 7 enter code 8.
- If your contributions had earnings, you should receive a 2026 Form 1099-R with code 8 that reports the taxable earnings, which you'll include on your 2026 tax return because the earnings were distributed in 2026.
- You can ignore a 1099-R with code P you receive later if the taxable amount in Box 2a is the amount you included in step 5, otherwise you may need to amend your 2025 return to include that amount.
Example of how to report an excess 401(k) deferral on your 2025 return.
What if I contributed more to my 401(k) than is allowed?
