Retirement tax questions

It seems that when you entered the Form 1099-R with code PJ in your 2020 amended return created a new excess contribution because the earnings on the excess are taxable income in 2020.

On the 2020 return please make sure that you enter the $300 removed by the due date on the penalty screen. You will have to pay the 6% penalty on the new excess contribution ($110) on your 2020 tax return.

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 Continue until the penalty screen and enter the $300 excess contribution amount withdrawn

You will also have to pay the 6% penalty on your 2021 tax return since the new excess wasn’t removed by December 31, 2021.

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 "Enter Excess Contributions" screen enter the new excess contribution from 2020 ($110)

You can avoid the 6% penalty for 2022 by making a regular distribution (without earnings and losses) by December 31, 2022. You will get a 2022 Form 1099-R and it will go on your 2022 tax return. Since you didn’t remove this $110 excess by the due date you will have to include this amount in the net contribution amount when TurboTax asks.

1. Click on "Search" on the top and type “1099-R” 
2. Click on “Jump to 1099-R” and enter all your 1099-Rs
3. Click "Continue" on the "Review your 1099-R info" screen
4. Answer questions until the "Enter Prior Year Roth IRA Contributions" screen and enter the net contributions prior to 2022 (include the $110 new excess not removed by the due date with your other contributions).

@DPNJ