In February 2024, I realized that I had contributed too much to my Roth IRA for the 2023 tax year. I contacted my brokerage to remove the excess contributions and earnings before the tax filing deadline for the 2023 tax year. I am now filing an amendment to my 2023 tax return now that I have recieved the 1099R related to this distribution. Note that the 1099R is dated for 2024.
Based on what I have been reading here, "Beginning on December 29, 2022, the 10% additional tax on early distributions will not apply to a corrective IRA distribution which consists of an excessive contribution and any earnings allocable to the excessive contribution, as long as the corrective distribution is made on or before the due date of the income tax return." I removed my excess contributions before the tax return due date, so I believe the 10% tax should not apply. However, when I review my 1099R, I see a value in Box 4 which appears to be 10% of the earnings. Is this correct? Below is a summary of my 1099R and my and my excess contributions in 2023.
Total Excess contributions to Roth IRA for 2023 = $3500
Gross Distribution = $4071.06 ($3500 contributions and $571.06 earnings)
Taxable Amount = $513.95
Federal Income Tax Withheld = $57.11 (10% x $571.06)
I feel like I should be getting the $57.11 back and the total earnings of $571.06 should be added to my income. Any help would be appreciated.
