ThomasM125
Expert Alumni

Retirement tax questions

You will receive a form 1099-R reporting the ROTH IRA distribution in the year following the distribution. It should be coded "8" in box 7 Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2022, for instance. That will tell the IRS that the excess contributions have been withdrawn.

 

Also, to comply with the distribution rules of the excess contributions, you just need to have adjusted your current year contributions to be under the allowed contributions for the current year, taking into consideration the balance of excess contributions going into the current year.

 

For instance, if you had $7,000 of excess contributions going into the current year, and you made no contributions for the current year, then you would by default have distributed the excess, assuming your limit on contributions for the current year is $7,000. 

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