@elpram215 wrote:
I am in a similar situation, but I am still eligible for partial Roth contribution (income between the $10,000 reduced contribution range). I withdrew the full $7,000 2024 Roth contribution in Jan '25. When reporting the 1099-R, I entered code P and J in box 7. My question is can I claim the 10% penalty waiver for the total excess earnings or only partial? The total earnings withdrawn is $1,100. Out of the $7,000 contribution withdrawn, about $3,000 is the considered "excess contribution."
The SECURE 2.0 act removed the 10% penalty on excess earnings withdrawn before the deadline.
If you had $3000 excess but removed $7000, then about $500 of the earnings is excess withdrawn before the deadline (not subject to the penalty) but $600 is other earnings, seemingly subject to the penalty. But, regular Roth IRA withdrawals are always contributions first, earnings last, so you should have about $3000 of "excess contribution", $500 of attributed earnings and $4600 of regular withdrawal of contributions, assuming you made contributions in a prior year.
I'm not sure how this situation should be reported.
@dmertz what do you suggest?
