It can be confusing.
A excess made *for* 2019 that is returned *in* 2019 would have a code 8. A excess made *for* 2019 that is returned *in* 2020 would have a code P. It is taxable for the tax year in which the contribution was made, not they year returned. Any earnings are taxable in the year returned.
(Code P means taxable in the previous year. Code 8 means taxable in the current year.)
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
[quote]
•If the distribution was for a 2020 excess deferral, your Form 1099-R should have code 8 in box 7. Add the excess deferral amount to your wages on your 2020 tax re-turn.
•If the distribution was for a 2020 excess deferral to a designated Roth account, your Form 1099-R should have codes B and 8 in box 7. Don’t add this amount to your wages on your 2020 return.
•If the distribution was for a 2019 excess deferral, your Form 1099-R should have code P in box 7. If you didn't add the excess deferral amount to your wages on your 2019 tax return, you must file an amended return on Form 1040-X. If you didn't receive the distribution by April 15, 2020, you must also add it to your wages on your 2020 tax return.
•If the distribution was for the income earned on an excess deferral, your Form 1099-R should have code 8 in box 7. Add the income amount to your wages on your 2020 income tax return, regardless of when the excess deferral was made
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**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.**
