Skip to main content
June 4, 2019
Solved

Hi. I over-contributed to my 401K due to a job change. I already converted my old company dollars to an IRA. Can I get the refund and 1000-R from the IRA to fix this?

  • June 4, 2019
  • 1 reply
  • 0 views
No text available
Best answer by dmertz

No, you can't take it from the IRA.  The amount that you contributed to the old company's 401(k) was a permissible contribution on it's own, so there is no justification for treating any of the money rolled over to the IRA as an excess contribution to the IRA as a result of having been ineligible for rollover to the IRA.

To avoid double taxation of the excess contribution, you'll need to be able to have the new company's plan distribute the excess no later than April 15, 2019.  If the new company's plan cannot accomplish that, you are stuck with reporting the excess contribution as income on your 2018 tax return and the money will be taxed again when eventually distributed.  You'll also have to mail your tax return since TurboTax will not let you e-file if your tax return includes W-2 that show excess retirement contributions 

1 reply

dmertzAnswer
Employee
June 4, 2019

No, you can't take it from the IRA.  The amount that you contributed to the old company's 401(k) was a permissible contribution on it's own, so there is no justification for treating any of the money rolled over to the IRA as an excess contribution to the IRA as a result of having been ineligible for rollover to the IRA.

To avoid double taxation of the excess contribution, you'll need to be able to have the new company's plan distribute the excess no later than April 15, 2019.  If the new company's plan cannot accomplish that, you are stuck with reporting the excess contribution as income on your 2018 tax return and the money will be taxed again when eventually distributed.  You'll also have to mail your tax return since TurboTax will not let you e-file if your tax return includes W-2 that show excess retirement contributions