Where do i enter 1099-R (code P) when amending a prior year tax return?

[aa2]

2nd attempt at this q.. TT deleted/archived my previous submission

I had excess contribution to my 401K in 2017, which was refunded to me in January of last year but I was incorrectly told this would be taxable income in 2018 so I did not add to my 2017 return. Received a 2018 1099-R (code P) this year. I have generated a "amended" copy of the return in TT to edit it.

Q is how to enter this income on amended 2017 tax return. In retirement section>1099-R>clicked yes on did you have any rollover, withdrawal in 2017>when entering the details, code P is for taxable income in 2016. So, do I enter the refund of excess to my W2 income? If yes, which employer since I changed jobs in 2017 - so employer on Dec 31, 2017? or file this with code 8? or after entering with code P, somewhere TT will clarify and make sure it applies to 2017 income?

Also, does this income need to be reflected in 2018 return?

Thanks!

[macuser_22 · Accepted solution]

A 2018 1099-R with a code "P" in box 7 is taxable in 2017, the year the contribution was made, not 2018.

You must amend 2017 to report it.   The 2017 1099-R interview will say that code P means "Return of contribution taxable in 2016", but the interview will ask if this it a 2017 1099-R or a 2018 1099-R.  Say 2018 and the "taxable in 2016" becomes "taxable in 2017"  (the year advances by 1 each year).

It is not reported in 2018 unless there were earnings in which case the earnings should be reported on a separate 2018 1099-R with a code 8 on box 7 to be reported in the year the earnings were returned.

[aa2]

Thank you! I will try that (ETA: That worked!). Will there be a penalty/interest due on the tax I now owe as a result of this amendment?

So, in 2018 tax return,  it (code P info) does not need to be added even as FYI? (I am adding 2018 1099-R code 8 in 2018 return.)

Another related question: As a result of tax law changes reducing our deductions for property tax/SALT combo and this additional tax owed in 2017, our tax withholding for 2018 MAY not be enough resulting in penalty. Without this amendment, we were ok. But after the amendment, with increased 2017 tax, we may not be (I still have to calculate). Will TT be able to address this now and tell us if we owe a penalty/interest given that I started the 2018 return before starting the 2017 amendment in TT and it did not carry over all the information from amended return? What if I add the 1099-R income with code P in 2018 return My concern is that we may find out 4 years from now and interest will keep accumulating between now and then. I would rather pay couple hundred dollars in penalty now than let it balloon to thousands. Thanks!

[macuser_22]

The code P 1099-P does not go the 2018 tax return at all and will have no effect on the 2018 tax.

Any additional owed 2017 tax on the amended 2017 tax return must be paid with a separate payment sent with the 2017 amended return.


Amended returns can only be mailed.  It is suggested that it be mailed certified with return receipt (or other tracking service) to verify that the IRS receives it.


<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed"...>

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/replies/3288565">https://ttlc.intuit.com/replies/3288565</a>

You can check the status of the amended return here, but allow 3 weeks after mailing.

<a rel="nofollow" target="_blank" href="https://www.irs.gov/filing/individuals/amended-returns-form-1040-x-/wheres-my-amended-return-1">http...>

[aa2]

Thanks. I am planning to mail the amended return and check status. However,

(1) Will there be a penalty/interest due on the tax I now owe as a result of this amendment?  I do not see any listed as part of TT calculation.
(2) Secondly, due to the amendment - we may not meet the threshold for avoiding penalty for underpayment of taxes in 2018. Basically our tax liability increased significantly due to the new tax law and our total deductions turned out to be lower than what they needed to be. I still have to calculate but it is possible that AFTER amendment of 2017 return, 2018 deductions are slightly less than 110% of 2017 deductions (they are definitely less than 85% of total tax liability - 2nd condition for avoiding the penalty). Before the amendment we were ok and had 110% of 2017 taxes deducted in 2018. So, the question is will TT be able to address this and tell us if we owe penalty/interest given that I initiated the 2018 return before amending the 2017 return. I just do not want to end up in a situation of owing thousands of dollars in 3 years instead of couple hundred dollars now!

Thanks again!

[macuser_22]

No penalty.   The code P just puts the box 2a amount back into your taxable wages that is taxed as ordinary income just as it would have been if your employer had not deducted it as a 401(k) contribution on your 2017 tax return.

I doubt that It will effect your underpayment.

The IRS issued an article this morning announcing an expanded penalty waiver.  
<a rel="nofollow" target="_blank" href="https://www.irs.gov/newsroom/irs-expands-penalty-waiver-for-those-whose-tax-withholding-and-estimate...>

[aa2]

Thank you. Our deduction for 2018 was less than 80% of the tax we owe! (we normally get a few thousand in refund. we checked our W2s and deductions 3X last year to make sure we were not going to be in this situation but did not realize how badly we would be impacted by cap on salt and other deductions). I am at the cusp of penalty threshold and therefore, it has a chance of impacting. I am working on the form 2210 calculations right now with revised numbers to see what happens.

[aa2]

Actually the 80% change helped us. I was looking at the wrong line in 2018 tax form. So we are all set! Thank you so much for sharing!

[macuser_22]

Glad it works out.