dmertz
Level 15

Retirement tax questions

As I understand it, you requested a return of $800 of your 2022 Roth IRA contribution and that was accompanied by $20 of earnings for a total gross distribution of $820.  A return of contribution is irrevocable and it's too late to make a new contribution for 2022, so there is nothing that you can do to undo the distribution.

 

Assuming that the Roth IRA contribution was made before the end of 2022, the Form 1099-R will have $820 in box 1, $20 in box 2a and codes J and P in box 7.  The $20 is taxable on your 2022 by entering into 2022 TurboTax this 2023 Form 1009-R and indicating that the form is a 2023 form.  2022 TurboTax will include the $20 on Form 1040 line 4b.

 

2022 TurboTax will also treat the $20 as subject to a 10% early distribution penalty, but the SECURE 2.0 Act eliminated this penalty for such distributions occurring on or after December 29, 2022.  You'll need to claim an Other Reason exception with respect to this $20, code 12 on Form 5329 line 2, to eliminate the penalty.

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