To confirm, you made the excess contribution for 2020 and removed it in 2022? You should have requested a regular distribution (without earnings) since it was after the extended due date of the 2020 return and gotten a 2022 Form 1099-R with code J. You might want to double-check with your institute.
Right now your 2022 Form 1099-R with codes P and J would indicate that you have to enter it on your 2021 tax return and that you remove a contribution for 2021.
Were you able to make Roth contributions for 2021? Did you make Roth contributions? If you were able to make Roth contributions, then you could amend your 2021 tax return and apply this excess to your 2021 contribution and reduce/eliminate the 6% penalty on your 2021 tax return as dmertz mentions:
- Click on "Search" on the top right and type “IRA contributions”
- Click on “Jump to IRA contributions"
- Select “Roth IRA”
- Enter your 2021 Roth contributions
- On the "Do you have any Excess Roth Contributions" answer "Yes"
- On the "Enter Excess Contributions" screen enter the total excess contribution from 2020 of $1,502 (if it wasn't carried over).
- On the Penalty screen enter that you removed $1,502 by the due date
You will still have to pay the 6% penalty on your 2020 tax return On Form 5320. If you entered your Roth contribution TurboTax should have automatically calculated it.
@pidgessn
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