How/where to report Excess contribution EARNINGS withdrawal in TurboTax 2023

Forum|Forum|2 years ago
January 27, 2024
1 reply
16 views

I made an excess contribution to a Roth IRA in 2023 and only now in January 2024 realize that my income was over the limit for Roth contributions in 2023, so I just withdrew the contribution and earnings. Because I did this before April 15, there will be no penalties on the withdrawn contribution but I have heard different things about the withdrawn earnings. One person said that I will need to pay income tax and a penalty on the withdrawn earnings. Another person said that a new law passed in early 2023, Secure 2.0, eliminates the penalty on the withdrawn earnings and that I just need to report the earnings on my 2023 return, even though they were withdrawn in 2024. I was told I will get a 1099-R for the withdrawal but not until a year from now in 2024. I don't know where to report the earnings in Turbotax. The retirement income portion doesn't give me an option because I don't yet have a 1099-R (and won't until next year). Can anyone help with this? Thanks.

TurboTax Home & Biz Windows

DavidD66

Level 15

Any investment earnings your excess contributions generated while in your account will have to be reported on your taxes as income in the year you made the contributions to your IRA. In other words, you will have to report the earnings on your 2023 tax return. You will receive a Form 1099-R for the 2024 distribution in 2025. You can wait until you receive the 1099-R and amend your 2023 return. Or you can go ahead and enter it on your 2023 tax return. To create a 1099-R in your 2020 return please follow the steps below: