Yes, you will split it in half.
You will enter the withdrawal of excess contribution and earning as a regular 1099-R. Using a substitute 1099-R might prevent you from being able to e-file and is generally only used if you cannot get a 1099-R issued which is not the case.
To create a 1099-R in your 2020 return please follow the steps below:
- Open your return
- Click on "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- Answer "Yes" to "Did you get a 1099-R in 2020?"
- Select "I'll type it in myself"
- Box 1 enter total distribution (contribution plus earning) $6,976
- Box 2a enter the earnings $976
- Box 7 enter P and J
- Click "Continue"
- On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.
The 2021 contribution will be similar but have codes 8 and J in box 7.
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