I am going to provide what happened next myself in case someone else is in the same situation as mine. So I reached out my IRA bank, and they suggested me to file a request to recode the 1099-R. I ended up filing two, one for 2020 and one for 2021. And I ended up getting an approval and I got two 1099-Rs back.
1099-R #1:
box 1 = 5600
box 2a = 0
box 7 = "8" (Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2021), "1" (Early distribution with no known exception)
1099-R #2:
box 1 = 200
box 2a = 200
box 7 = "1"
So the amount here reflects my contribution + earnings in each calender year instead of tax year. Both 1099-Rs are dated 2021. So since I lost money I didn't owe any tax in capital gain.
So my questions are:
1. Do I need to amend 2020? Since I put $0 for contribution to IRA thinking I would just withdraw the excess afterwards.
2. If I need to amend 2020 tax return, how do I file so that turbo tax doesn't see my contribution to Roth as the excess?
2. Do I file both 1099-R for tax year 2021?
