@KREC wrote:
I’m confused. In 2019 I was allowed to contribute $450 for the year so instead of contributing, $450 of the $2110 from the previous year’s excess was carried over (absorbed) leaving the excess as $1660. In 2018 the 6% penalty was paid on the $2110; in 2019 on the $1660; and again in 2020 on the $1660 (I was unable to carryover any excess into 2020 as my MAGI didn’t allow for any contributions that year). So my excess that is still in the account is $1660.
Your post was not clear that instead of removing the excess you applied it to the current years allowable contribution which *is* removing the excess (it is not absorbed it was removed by applying it to the current years allowable contribution ), so yes the carry forward excess would be reduced by the amount of the allowable new contribution
**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.**
