Yes, you can just exclude the tax withholdings when you create the 1099-R on your 2020 tax return since they are for 2021.
Just enter the following information for the 1099-R:
- Login to your TurboTax Account
- Click on the Search box on the top and type “1099-R”
- Click on “Jump to 1099-R”
- Select "I'll type it in myself"
- Box 1 enter total distribution (contribution plus earning)
- Box 2 enter the earnings
- Box 7 enter P and J
- On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.
Please be sure to include the 1099-R 2021 on your 2021 tax return when you receive it to get credit for the taxes withheld. The rest of the distribution information won't get carried to Form 1040 because of the code P in box 7.
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