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Level 3

2017 1099-R with PJ code in Box 7: Confusion why need to amend 2016 return

I have a 2017 1099-R with an amount in Box 1 - Gross distribution and Box 2 -Taxable amount.  There are codes PJ in Box 7 - Distribution code(s). This is for excess contributions made in 2015, but not withdrawn until Jan. 2017. When I enter the information into TurboTax, it says "It loos like you may need to amend your 2016 return. Your 1099-R reports earnings on a contribution you made in 2016. This information needs to go on you 2016 return." Do I  need to amend the 2016 return since the contribution nor withdrawal was made in 2016?

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Level 20

2017 1099-R with PJ code in Box 7: Confusion why need to amend 2016 return

TurboTax is reminding you that the effect of the return of the Roth IRA contribution was reportable on your 2016 tax return.  The result on your 2016 tax return should have been that that amount returned was not included as part of your Roth IRA contribution, that any gains shown in box 2a of the Form 1099-R was included in income, if you were under age 59 when you received the return of contribution your tax return should have included Form 5329 calculating the 10% early-distribution penalty on the box 2a amount and that you included an explanation statement describing the return of contribution.  If your 2016 tax return already showed these there is no need to amend your 2016 tax return.