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After you file
fanfare is correct. Earnings are only required to be distributed on a return of contribution before the due-date of the tax return, including extensions, a deadline which has passed in this case. Paying a 6% penalty and requiring the earnings to be distributed are mutually exclusive.
Consider the case where an excess contribution can be applied as a contribution for the following year. If that happens, there is no requirement that any earnings be distributed. Doing so is equivalent to taking the regular distribution of exactly the excess (no earnings) and using those funds to make a new contribution.
‎November 19, 2023
1:40 PM
1,615 Views