Basically it makes no sense to have tax withholding on a return of contribution code "JP" because only the earnings are taxable in the year that the contribution was made, however, any tax withheld can only be reported in the tax year that it was withheld. Therefore, the tax withheld cannot apply the the taxable earnings in the previous tax year. It is not possible to withhold tax in 2019 to pay 2018 taxes.
The code P 1099-R must be entered in an amended 2018 tax return so that the box 2a earnings will be added as taxable 2018 income. It must also be entered in the 2019 tax return so that the take withheld in 2019 will be applied to 2019 withholding.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
