DanaB27
Expert Alumni

Retirement tax questions

If you made a withdrawal of a 2021 excess Roth contributions plus earnings in 2022 then you should have gotten a Form 1099-R with codes P and J. This has to be reported on your 2021 tax return and only the earnings in box 2a will be taxable.

 

According to the IRS to avoid the 6% tax on excess contributions, you must withdraw:

  • the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and
  • any income earned on the excess contribution.

 

Please verify with your financial institute if the earnings were withdrawn (if there was a loss the withdrawn amount might be lower than the contribution amount). If you only withdrew the contribution but not the earnings (if you had them) then you will still have to pay the 6% penalty for 2021. You won't have to pay the penalty in 2022 and future years since you withdrew the contribution amount.

 

Please see What happens if I made an excess Roth IRA contribution for additional information.

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