@dmertz
Hi please advise on the following situation.
In March 2020 I made a contribution to my 2019 Roth IRA account. After completing my tax return in June 2020 came to realize I exceeded the income cap. At that time I put in a request with my broker to distribute the contribution which was prior to filing the 2019 tax return. What I have now come to realize is that only the contribution amount was withdrawn and not the earnings, so now I am trying to figure out next steps. Furthermore, the 1099-R for 2020 from the broker is coded as code T instead of a the code for withdrawal of excess contribution. They will not change the tax form.
So my questions are:
1) I have determined the amount of earnings that should have been withdrawn had it been correctly calculated from March 2020 - June 2020, however given the earnings still remains in the account what implications does this have? How would the earnings to remove be calculated now given its still in the account?
2) How do I correct my filings for this and do I need to withdraw the earnings now or do I pay a penalty and that earning can remain in the account? Do I amend a 2019 filing? How does this get reported on the 2020 return? Given that 2019 contribution was removed but not the earnings, does that means I need to report the earnings balance as excess roth balance on the 2019 return and pay the penalty on that? And pay it again in 2020 as its still in the account? Am trying to get it removed now in 2021.
3) What do I do about the 2020 1099-R form with Code T which doesn't seem correct. Can I put an explanation statement on my tax return to explain that the amount distributed was a return of the 2019 excess contribution?
Thanks
