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Retirement tax questions
It's a mistake to remove the earnings under these circumstances. There is no requirement to do so when you have been assessed the 6% excess contribution penalties. Your regular distribution to resolve this excess in 2020 and beyond should only be for the amount of the excess contributions, $5,900. Because you will only be removing the $5,900 originally contributed, it will all be from contribution basis and therefore will be nontaxable.
‎July 13, 2020
2:01 PM