DaveF1006
Expert Alumni

Retirement tax questions

It depends. First of all, the second 1099R that show the return of contribution, that should have a Code 8 in Box 7 showing that it is a return of contribution taxable in 2021. As a result, this 1099R is not taxable income.  Now you need to tell Turbo Tax you returned this contribution and you do this by:

  1. Federal Taxes>deductions and credits>choose what you work on

  2. Go to Retirement and investments>Traditional and Roth IRA Contributions

  3. Select Update

  4. Make sure the contribution reflect the amount of the contribution that was made for the account.

  5. As you navigate through the questions, you will reach a screen that says, "Your XXX contribution is too high.  When you reach this screen, press continue.

  6. This next screen tells you have a penalty but gives you an option to return the excess portion of the contribution.  Here is where you input the excess contribution that was given back.

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