DanaB27
Employee Tax Expert

Retirement tax questions

Yes, it would be too late and you will have to pay the 6% penalty on your 2021 return since you didn't remove the earnings. Please see How do I amend my federal tax return for a prior year?

 

"For purposes of determining excess contributions, any contribution that is withdrawn on or before the due date (including extensions) for filing your tax return for the year is treated as an amount not contributed. This treatment only applies if any earnings on the contributions are also withdrawn. The earnings are considered earned and received in the year the excess contribution was made." (IRS Pub 590-A)

 

Code P and J would only apply if you requested a withdrawal of excess contribution for 2021 plus earnings before the extended due date in 2022. This has to be entered on your 2021 tax return.

 

You should have gotten 2022 Form 1099-R with code J since you took a regular distribution without earnings and this will be entered on your 2022 tax return. This will remove the excess contribution on your 2022 tax return.

 

@mcarvv 

 

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