@kllesser wrote:
DanaB27,
My son contributed a total of $6770 to his Roth IRA for 2023. We caught the error and had the excess contribution ($270) and the NIA ($15.15) distributed in Feb 2024 (so total distribution of $285.15). I'm working on his tax return now and want to make sure I enter everything correctly in TurboTax and will still be able to file electronically and not have issues with the Virginia state return. I have three questions:
3) When entering the Roth IRA contributions in Deductions & Credits, should I enter the original amount contributed ($6770) and then enter $270 on the "Contributions Withdrawn Before the Due Date" screen? OR should I just enter $6500 for the first and $0 for the second?
Thanks!
Follow the instructions and pictures from this post.
https://ttlc.intuit.com/community/retirement/discussion/re-2023-excess-roth-ira-contribution/01/3190...
For the withdrawal, enter the entire distribution in box 1 of the substitute 1099-R, and the taxable amount (the earnings) in box 2a. Use distribution codes J and P. You can ignore the question about "how did you use this money because it might reduce your tax" because the withdrawn earnings ($15.15) are always taxable, and withdrawn earnings due to a correction are never subject to the 10% penalty for early withdrawal (this is a recent change in the tax law).
"3) When entering the Roth IRA contributions in Deductions & Credits, should I enter the original amount contributed ($6770) and then enter $270 on the "Contributions Withdrawn Before the Due Date" screen? OR should I just enter $6500 for the first and $0 for the second?"
Either is correct, it doesn't matter. Roth contributions are not tax deductible, so what you enter here won't change your taxes, except that entering the correct amount is what allows the program to calculate your excess for you. So I would enter $6770 and $270 just to be consistent.
