To verify, you made an excess contribution for 2020 that did not remove before the due date? And you made another excess contribution for 2021 that you will remove before Oct 17th, 2022?
It seems you removed some excess contribution because you got 2021 Form 1099-R with codes 8J. This code indicates that a contribution made for 2021 was removed in 2021.
Yes, if you didn't remove the 2020 excess by December 31, 2021 then you will have to pay the 6% penalty for 2020 and 2021.
For 2020 you will only enter the contribution and TurboTax will automatically calculate the 6% penalty on Form 5329 part IV. Please see How do I amend my 2020 return? if needed.
For 2021 please follow these steps:
- Click on "Search" on the top right and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select “Roth IRA”
- Enter the Roth contribution for 2021
- On the "Do you have any Excess Roth Contributions" answer "Yes"
- On the "Enter Excess Contributions" screen enter the total excess contribution from 2020 (if it wasn't carried over).
- On the penalty screen enter that you removed the excess contribution for 2021 (without earnings and losses). TurboTax will only calculate the 6% penalty on the 2020 excess amount.
To avoid the 6% penalty in 2022 on the 2020 excess you will have to take a regular distributions to remove the excess contribution (without earnings or losses) by December 31, 2022.
@fluxquantum94
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
