DanaB27
Expert Alumni

Deductions & credits

No, since you removed the excess plus earnings before the due date of the 2021 tax return you do not have to pay the 6% penalty. It seems you didn't have any earnings and instead had a loss since box 2a is blank and you have returned less than the excess contribution. Therefore, this won't be taxable on your 2021 tax return since only the earnings are taxable and subject to the 10% early withdrawal penalty.

 

 

Please make sure that you do not enter that you have an excess contribution from prior years on your 2022 tax return (if there is an entry delete it):

 

  1. Click on "Search" on the top right and type “IRA contributions”
  2. Click on “Jump to IRA contributions"
  3. Select “Roth IRA
  4. On the "Do you have any Excess Roth Contributions" answer "Yes"
  5. On the "Enter Excess Contributions" screen delete anything that was carried over.
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