I need clarification on how to handle excess ROTH IRA contribution for tax filing. I have gone through similar posts but I have found conflicting answers. I contributed $1000 in December 2020 for the year 2020 in my Roth IRA account. I realized in January 2021 that I was not allowed to put this money due to the income limit. I pulled out the excess contribution including any earnings in February 2021 (Before May 17- the 2020 tax year filing due date). I did withhold Federal and State taxes when I made the request of pulling out excess contribution and earnings. I went on and filed my taxes in April 2021 and Turbo tax did inform me that I was not allowed to make such contribution. Upon which, I answered the question that I will take the excess out including any earnings by May 17, 2021 because I had taken out the excess & earnings in February itself.
Now, I have received 1099-R (with Year 2021) in January, 2022 for the excess contribution I made in 2020 with the Code J, P in Box 7. I also see the Federal and State taxes withheld amount on the 1099-R form. My question is do I need to go back and amend my 2020 tax return with this 2021 1099-R I have received? OR I will enter this 2021 1099-R with my 2021 tax filing? What I have understood from previous posts is that if you withhold federal and state taxes when you take the excess contribution out including any earnings, you do not need to amend the previous year tax return because the taxes were withheld in the current year which now need to be included with current tax year filing, is this correct? Please confirm.
