So my wife's investment guy made a $7K Roth contribution for her 2019 and 2020. Problem is she had no earned income those years. He realized and took all 14k out (plus ~4k in earnings) in May 2021.
We're doing 2021 taxes and have two 2021 1099-R's showing both distributions.
2020 one shows whole distribution with earnings, but only the earnings in box 2 taxable. Box 7 code = PJ (excess roth distribution AND Early roth distribution?).
2019 one shows whole distribution with earnings, but taxable amount blank and Box 7 = J (early distribution?)
How do we fix this?
Am i right in that we have to amend 2019 and pay 6% on the 7k (not earnings or early distribution?)
Also amend 2020 and pay 6% on 7k (or did we get it out in time by May 2021?)
Then file for 2021 with 6% fee on 7k for 2019 AND 2020? (or just 2019?)
Seems like her earning are all captured with her other earnings for 2021 1099B's etc so penalty just on the base 7k's?
Also, are J penalties for early withdrawal N/A since we took it back out and will be paying the 6% penalties?
Any help appreciated!
PJC
