Get your taxes done using TurboTax

It depends if your 2020 tax return shows the 6% penalty on your 2020 Form 5329 IV. If yes, then you do not need to amend your 2020 tax return.

The Form 2022 1099-R with code JP will have to be included on your 2021 tax return. The earnings in box 2a will be taxable income and subject to the 10% early withdrawal penalty (if you are under 59 ½). Additionally, you will have to pay the 6% penalty for the 2020 excess contribution on Form 5329 IV. But you don’t pay the 6% penalty for the 2021 excess since you removed it before the extended due date. Please make sure you enter that you removed the 2021 excess contribution during the IRA contribution interview (on the penalty screen).

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. Enter your Roth contribution for 2021
6. On the "Enter Excess Contributions" screen enter the total excess contribution from 2020 (if it wasn't carried over).
7. On the Penalty screen enter the 2021 contribution as removed by the due date.

Please be aware, on your 2022 tax return you will have to include the 2020 excess contribution in net contributions prior to 2022 when TurboTax asks since the excess for 2020 wasn’t removed by the 2020 due date and is now removed in 2022 as a regular distribution (Form 1099-R code J):

1. Login to your TurboTax Account 
2. Click on "Search" on the top and type “1099-R” 
3. Click on “Jump to 1099-R” and enter all your 1099-Rs
4. Click "Continue" on the "Review your 1099-R info" screen
5. Answer all the questions and make sure you enter the net contributions prior to 2022 on the "Enter Prior Year Roth IRA Contributions" screen (include the 2020 excess but not the 2021 and 2022 excess).
6. Answer the remaining question.

@Taxtime2000