dmertz
Level 15

Retirement tax questions

A return of contribution is a special type of distribution, not an ordinary distribution, and the custodian usually has a special form for the purpose because extra information is needed beyond what is needed for an ordinary distribution.  The custodian uses this information to calculate the amount of investment gain or loss attributable to the amount being returned which must also be distributed.

 

The code will be code P rather than code 8 because the return of the 2021 contribution will be in 2022.  Code P on a 2022 Form 1099-R indicates that any gains (the only amount includible in box 2a as taxable) will be taxable and potentially subject to an early-distribution penalty on your 2021 tax return.