DanaB27
Expert Alumni

Retirement tax questions

No, most likely you do not need to file an amended return since this is a return of excess contribution only the earnings will be taxable income and subject to the 10% early withdrawal penalty if you are under 59 ½. Your earnings are only $1.86, so the penalty is only $0.19 (will be rounded to $0) and since the tax table adjusts the tax in steps the additional $1.86 might not increase your taxable income to increase your tax.

 

If you want to verify that your tax doesn’t increase then you can complete Form 1040-X once it is available. Please see How to amend a tax return for instructions (this will be updated once the 2021 Form 1040-X is ready). Please do not send the amendment until your original return has been processed.

 

To verify your 1099-R has codes J and 8? Please be aware if it has code P then it belongs on your 2020 tax return.

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