Workplace 401K / Roth Component

Forum|Forum|11 months ago
April 8, 2025
1 reply
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I have a workplace 401K that offers both pre-tax and Roth components, and I contributed to both last year.

Turbotax (Desktop) is telling me that I have an excess Roth contribution due to AGI limits; the Roth contribution amount is listed as code AA on my W-2 - and it wants me to pay a penalty

However, according to IRS 415(c) (and the trustee), I'm nowhere near the income/contribution limits because it's a *workplace* 401K, not an individual Roth.

So, how do I convince Turbotax desktop that the Roth component isn't subject to those limits and stops assessing a penalty?

Thanks!

MinhT1

Did you enter your Roth 401(K) contributions as a Roth contribution in TurboTax?

If so, you have to delete that entry. Roth 401(k) are only reported in box 12 of your form W-2.

The sum of your 401(k) contributions (code D in box 12 of your W-2) and your Roth 401(k) contributions (code AA) must not exceed $23,000 or $30,500 if you are 50 or older.

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rb777Author

>Did you enter your Roth 401(K) contributions as a Roth contribution in TurboTax?

No - the amount comes from my W-2, box 12, code AA

The problem isn't the amount of the total 401(k) contributions (under the threshold), it's that it the software is treating the workplace Roth contributions as "individual Roth" which has income limits, while plans that offer Roth in their 401K have no such income limits, per IRC 415(c), only contribution limits - and my Roth contribution is far under those limits.

And it's actually impossible to recharacterize a Roth contribution under a workplace plan

So do I simply delete the "Roth" contribution section from the software?