Would this situation be handled differently if you didn't catch the excess contribution until after April 15th of the following year? My employer just notified me that I had excess deferrals in 2020 (because of job change) but it's already past April. Am I stuck with penalties now?

I went through this exact same nightmare with excess 401(k) contributions two years ago! The frustration of having your plan administrator refuse to issue the correct 1099-R code is maddening. Here's what I learned from my CPA and confirmed with an IRS agent: You're absolutely correct that the excess deferral should be reported as income in 2020 (the year you made it), even without the proper 1099-R. The key is that when excess deferrals are returned by April 15th of the following year, they're taxable in the year of deferral, period. What I did was add the excess amount to my wages on Line 1 of my 2020 Form 1040, then attached a brief statement explaining that I was including returned excess 401(k) deferrals per IRS Publication 525. When I received the code P 1099-R in 2021, I reported it but then subtracted it out on Schedule 1 as "other income" with a negative amount and notation that it was previously taxed. The IRS agent I spoke with said this approach was completely correct and happens more often than you'd think because plan administrators don't always issue the right codes. Just keep detailed records of everything - the original excess, when you requested the return, confirmation of the distribution, etc. Don't stress about "creating" your own 1099-R - that's not necessary. Just report the income properly and document your reasoning.

I've been dealing with this same ID.me nightmare for the past month! What finally broke me out of the loop was using a completely fresh approach: I borrowed my neighbor's tablet, connected it to the coffee shop wifi down the street, and created a brand new ID.me account with my old college email address. The key was using a phone number I'd never used with ID.me before (my work cell). The whole verification process went smoothly since their system didn't have any failed attempt flags on that combination. Took about 20 minutes total and I finally got access to my transcripts. Sometimes you just have to outsmart their security system by starting completely clean. Also learned that if you've failed too many times from the same device/network combo, you're basically blacklisted for a while. Hope this helps someone else avoid the weeks of frustration I went through!

Ugh, I feel your pain! I went through this exact same ID.me disaster about 6 months ago and it nearly drove me insane. What finally worked for me was the "nuclear option" - I had to use a completely different device (borrowed my brother's computer), connect through a different network (used my phone's mobile hotspot), and most importantly, use a phone number that I had NEVER used with ID.me before (ended up using my mom's cell phone for the verification codes). The whole thing took maybe 30 minutes once I stopped trying to fix my "flagged" setup. It's ridiculous that we have to jump through these hoops just to see our own tax information, but ID.me apparently blacklists your device/network combo after too many failed attempts. The system is totally broken but this workaround should get you unstuck. Also, make sure you're not using any browser extensions or VPN when you try - those can interfere with their verification process. Good luck!

For anyone waiting on verification codes: • Average mail delivery time: 5-10 business days • Verification completion time: ~15 minutes online • Post-verification processing: typically 5-14 days • Most common hold codes: TC 570/971 combination • Fastest resolution: Online verification (vs. phone) • CRITICAL: If no code arrives within 14 days, call IRS immediately! • Need code TODAY? Call early (7am EST) for shortest wait times Running out of time and patience? Most successful verification calls happen Monday-Wednesday before 9am EST!

I'm currently going through this same process! Filed on February 28th and got the dreaded "verify your identity" notice on March 5th. Still waiting for my 14-digit code to arrive in the mail - it's been 6 business days so far. The uncertainty is really stressing me out because I have some unexpected car repairs that came up and was really counting on this refund. From what I'm reading here, it sounds like most people are getting their codes within that 5-10 day window, so I'm trying to stay patient. @QuantumLeap thanks for sharing that timeline breakdown - it's helpful to know what to expect after verification is complete! Has anyone tried calling the IRS to ask about the status of their verification code being mailed? Or is that just a waste of time since they probably can't tell you anything anyway? 😕

16 Another thing to check: look for Box 14 on your W-2. Sometimes employers will put additional information there, including health insurance premiums. It's an optional field that employers can use to provide additional information. The stuff in Box 14 doesn't directly impact your tax return calculations, but it can be helpful for understanding what went into the numbers in the other boxes.

Just want to echo what others have said here - your health insurance premiums ARE being treated as pre-tax, which is why you're not seeing them itemized separately like your 401k contributions. Think of it this way: your employer takes out your health insurance premiums before calculating your taxable wages. So when they report your wages in Box 1 of your W-2, those health premiums have already been subtracted. That's different from 401k contributions, which get reported separately in Box 12. To double-check this is working correctly, grab your last paystub of the year and look at the year-to-date totals. Your gross pay minus all pre-tax deductions (401k + health insurance + any others) should equal what's shown in Box 1 of your W-2. The bottom line: you're getting the tax benefit you expected from those health premiums - they're just handled differently in the reporting than retirement contributions. Your AGI is already reduced by that $2,700, so you don't need to do anything else when you file your return.

Just a warning to track everything super carefully. My cousins both tried to claim my grandma in the same year without telling each other. The IRS flagged both returns and they both got audited. Total disaster and caused a huge family fight lol.

One thing to consider that I don't see mentioned much - if your mom ever needs to apply for Medicaid or other means-tested benefits in the future, being claimed as your dependent could potentially affect her eligibility. Some programs consider the income and resources of the person claiming her as a dependent when determining benefit eligibility. This probably won't be an issue given her current situation, but it's worth keeping in mind for long-term planning. You might want to check with a benefits counselor or elder law attorney if she's likely to need additional assistance programs down the road. Also, make sure you understand the "tie-breaker rules" if anyone else in your family is also providing support. The IRS has specific rules about who gets to claim a dependent when multiple people are eligible, and it's not always the person providing the most support.