dmertz
Level 15

Retirement tax questions

The amount of the excess contribution returned is the unadjusted amount of the excess, not the adjusted amount that includes gains.  You'll also need to enter into 2020 TurboTax the code JP 2021 Form 1099-R that you expect to receive next year so that the gains will appear as taxable income on 2020 Form 1040 line 4b and will appear on 2020 Form 5329 as an early distribution subject to the 10% early-distribution penalty.  This 2021 Form 1099-R will have:

 

  • Box 1 = returned contribution plus gains
  • Box 2a = just the gains
  • Box 7 = codes J and P