To clarify, did you have earnings listed in box 2a? Only the earnings will be taxable when you withdraw a excess contribution plus earnings. These earnings will be also subject to the 10% early withdrawal penalty if you are under 59 1/2.
Yes, code P is correct. Please be aware, that code P will say in the drop-down menu "Return of contribution taxable in 2019" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2020.
- Click on the "Search" on the top right and type “1099-R”
- Click on “Jump to 1099-R”
- Enter your Form 1099-R as shown
- Click "Continue"
- On the "Which year on Form 1099-R" screen say that this is a 2021 Form 1099-R.
- Click "Continue" after all 1099-R are entered and answer all the questions.
- Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" if you are over 59 1/2 (if you are under 59 1/2 click "Continue")
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