@wmct wrote:
Hello,
Your information is really useful. I was in similar situation where the money was returned to me in the same year 2020 after I found out that I didn't qualify for Roth IRA. The 1099 R form Fidelity sent me has a distribution code J(early distribution from Roth IRA) Shouldn't they give me a code P (return of contribution taxable in 2019) instead?
That depends of you just asked for a regular distribution of the money or a "return of contribution" plus earnings. An ordinary distribution will have a code J, a return of contribution will have a code PJ. A code PJ is taxable in a 2019 tax return and code J in taxable in 2020. A code PJ eliminates the 6% 2019 excess contribution penalty, a code J means you must fie a 2019 5329 form with the 6% penalty.
Perhaps the financial institution sim-understood and needs to issue a corrected 1099-R.
**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.**
