dmertz
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

Retirement tax questions

You must obtain a regular distribution of the amount of the excess with no adjustment for investment gain or loss.  When making this regular distribution, tell the IRA custodian nothing about this distribution being to correct an excess contribution, doing so will only potentially cause them to process the distribution incorrectly.

 

This distribution will be a nontaxable distribution of Roth IRA contribution basis.

 

Because the excess will not be corrected until 2025, you'll have excess contribution penalties on both your 2023 and 2024 tax returns.  The reporting of the distribution on your 2025 Form 5329 will eliminate the excess.

 

 

View solution in original post