#1) No. Your 2018 & 2019 excess was $6,500. An excess contribution penalty has nothing whatsoever to do with the normal tax on taking a distribution. Age makes no difference. What the 2018 & 2019 excess was has nothing to do with how much you are eligible to contribute in 2020. The 6% penalty *repeats* each year that the excess remains. It is a separate 6% penalty for 2018 & 2019.
If removed in 2020 then that is a 2020 distribution and removing your own contribution is not taxable reguardless of age.
#2) You file a 5329 form for 2018 & 2019, not a 1099-R. The only 1099-R that you will receive will be for the 2020 distribution which is the total of all excess contributions reguardless of the year of contribution.
Why do you have a 2019 1099-R? You did not say that you were issued a 2019 1099-R. What was removed in 2019?
#3) You misunderstand. It was not necessary to have the earnings returned at all because paying the 6% penalty allows the earnings to remain.
There should be nothing on line 1 of the 2019 5329 because the earnings were NOT removed in 2019, you removed that in 2020 so the earnings will be reported on your 2020 tax return and if you are over age 59 1/2 the earnings will not be subject to a penalty on a 2020 5329.
**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.**
