Retirement tax questions

You should get a 2023 Form 1099-R with code T or Q for the regular distribution of the 2020 and 2021 excess contributions. This will be entered next year on your 2023 tax return and is not taxable.

You should get a 2023 Form 1099-R with codes 8 and J for the 2023 excess contribution. This will be entered next year on your 2023 tax return. Only the earnings will be taxable. Enter the Form 1099-R and in the follow-up questions enter the amount from box 2a under "Another reason" on the "Did you use your IRA to pay for any of these expenses?" screen since you are over 59 ½ to get the exemption from the 10% early withdrawal penalty. 

You should get a 2023 Form 1099-R with P and J for the 2022 excess contribution. This must be entered on your 2022 tax return. Only the earnings will be taxable. You have two options:  

• You can wait until you receive the 2023 Form 1099-R in 2024 and amend your 2022 return or
• You can report it now in your 2022 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. Then you must enter the 2023 Form 1099-R into the 2023 tax return since the withholdings are reported in the year that the tax was withheld. The 2023 code P will not do anything to the 2023 tax return but the withholdings will be applied to 2023.

To create a Form 1099-R in your 2022 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2022?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2a enter the earnings
8. Box 7 enter J and P
9. Click "Continue"
10. On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.
11. Click "Continue" after all 1099-R are entered and answer all the questions.
12. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" since you are over 59 1/2 

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2021" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2022.

@ktax1