"Plan Type: 403(b)(9) Non-electing Church Plan
"Background: Participant (under age 59.5) contacted the plan in May 2025 because his tax professional told him he did not have enough includible compensation to support the amount of Designated Roth 403(b) deferrals he made in 2024. For purposes of my question, he only made Roth deferrals to the plan and these excess deferrals totaled
$5000, and there were $100 in earnings on that excess.
"Questions: Since the distribution will occur after April 15, 2025, there is some confusion as to how it is to be reported on the 2025 1099R. IRC Section 402A(d)(3) seems to instruct the payer to tax the participant on the full distribution, not just the earnings portion, when distributed after April 15 (which seems counter
intuitive).
"IRC Section 402A(d)(3) states the following: (3) Treatment of distributions of certain excess deferrals Notwithstanding section 72, if any excess deferral under section 402(g)(2) attributable to a designated Roth contribution is not distributed on or before the 1st April 15 following the close of the taxable year in which such excess deferral is made,
the amount of such excess deferral shall -- (A) not be treated as investment in the contract, and (B) be included in gross income for the taxable year in which such excess is distributed.
"Q1: Referring to the highlighted text, does this mean that the 1099R should be written as follows: Box 1: $5100 Box 2a: $5100 Box
5: (blank) Box 7: 1, 8 (assuming no known exception to early distribution)
"Q2: Does withholding apply to this distribution?"