1. Home
  2. Taxes General Forum
  3. Return of 401k contribution - highly compensated employee

Return of 401k contribution - highly compensated employee

My husband received a check for a portion of his contributions to the company 401k because he has been deemed a highly compensated employee and is not allowed to contribute the 14% that he had deducted from his pay. I understand that this money must be reported on our 2007 return and that he will get a 1099-R in January of 2009 that will report the distribution to the IRS.

How do we report this distribution on the 2007 return? I'm thinking it goes on Line 7 as wages, but do we need to attach some kind of explanation for the source of the income?

Next year when the 1099-R arrives, how does that get reported on the 2008 return? Or does it get reported at all? I'm confused.....

Reply to
Vigo
Loading thread data ...

Yes, line 7. Attach 1099-R if tax was withheld (probably there was). There should be no penalty.

Reply to
removeps-groups

That's where it goes, and you need no explanation.

It will be coded to indicate that its reporting a disbursement that was 2007 income. You won't have to do anything on your 2008 return.

Reply to
Phil Marti

When the 1099-R arrives it will have a code P in box 7a which denotes the excess contribution made in 2007. Since you have already accountied for the adjustment in year 2007 you do not have to file an amended return for 2007. It would not be reported in 2008.

========================================= MODERATOR'S COMMENT: When responding, please delete all unnecessary parts of the post to which you respond.

Reply to
Allan Martin

Thanks once again for your help!

Reply to
Vigo

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.