Dave,
There seems to be a lot of conflicting answers concerning the tax treatment of the withdrawal of excess contributions and earnings to a Roth IRA. Some people are saying that you need to create a "dummy" 1099-R to use when filing your 2019 return because the earnings are taxable in 2019, and if you wait until you receive your 1099-R in 2021 then you will have to amend your 2019 return. However, you say this is not the case. Instead you say the withdrawn earnings are taxable in the year they are withdrawn. Therefore, you should wait for the actual 1099-R in 2021, and you will not have to amend your 2019 return. Do you have IRS documents or other documents that explain this or make it more clear?
A lot of the discussion seems to be around the code used in Box 7. Looking at https://www.irs.gov/pub/irs-pdf/f1099r.pdf it says that if code 8 is selected then it would be taxable in the current tax year, but if code P is selected then it would be taxable in the prior tax year. So if code P is selected then wouldn't an amendment be required for the prior tax year?
Looking at the 1099-R that will be sent out in 2021 it reads:
8—Excess contributions plus earnings/excess deferrals (and/or
earnings) taxable in 2020.
P—Excess contributions plus earnings/excess deferrals (and/or
earnings) taxable in 2019.
Thanks
