No, there will be no amendment for 2021 upon receipt of the 1099-R for 2022. You are handling this now, as you should.
Unless this was an excess contribution in 2020, that was removed late in 2021 (past the filing deadline, plus extension), then code P is not applicable. That code is strictly for an excess in 2020 that was not withdrawn on time. If this is the case please clarify here. If you removed an excess for tax year 2021, then use code 8 as indicated.
Enter in Box 2a only the earnings which is what is taxable in 2021. If you removed the excess on time there is no excise penalty of 6%. However if you're under 59 1/2, the government will also charge you a 10% early withdrawal penalty on any earnings you withdraw. This will trigger Form 5329 in TurboTax because of the age (if you are under 59 1/2).
- If you catch your mistake before the tax filing deadline for the year, AND you remove the excess before you file your taxes, there is no 6% penalty. You have to remove your excess contribution and any earnings attributable to that excess contribution.
Using the correct code in 2022 should eliminate any taxation of the distribution in 2022.
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