Retirement tax questions

1. Yes you had until Oct 15th to withdraw the excess contribution, therefore you successfully have withdrawn the first excess contribution. You should not have to pay the 6% excess penalty on this amount.

2. and 3. Yes, you will enter the amount withdrawn before Oct 15th (without earnings) on the penalty screen during the IRA contribution interview as the excess withdrawn by the due date. You do not pay the 6% penalty on that amount. But you will have to pay the 6% penalty on the new excess contribution amount for 2020 and for 2021.

For the new excess contribution amount, you will make a regular distribution (without earnings) by December 31, 2022, to avoid any future 6% penalty.

On your 2020 tax return after adding the Form 1099-R:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Continue until you get to the penalty screen and enter the amount withdrawn before Oct 15th, 2021 (without gains).

On your 2021 return to trigger the 6% penalty:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. On the "Enter Excess Contributions" screen enter the total excess contribution from 2020