@aksnorth wrote:
Note, the full amount of the excess contribution, plus earnings, will be withdrawn before April 15, 2021 to avoid the 6% penalty. I assume all earnings should be reported on the 2020 return, is this correct?
No. A contribution *for* 2019 had to be returned BEFORE July 15,2020 (or Oct 15, 2020 only if you filed an extension or filed your 2019 return before July 15.
After if you did not remove it in 2020 at all then you owe a 6% penalty for the 2019 tax year, AND because the penalty repeats every year until removed and it was not removed in 2020 before Dec 13, 2020, you also owe a 2020 6% penalty on the excess.
Before the end of 2021 yiu need to remove the excess, but nit the earnings as a regular Roth distribution that will get a 2021 1099-R with a coed J and will not be taxable since yiu removed your own contribution.
At this date, there is no way to avoid both the 2019 and 2020 6% penalties since the time to remove has passed for both years.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
