dmertz
Level 15

Retirement tax questions

This indicates that you associated a Form 1099-Q with the wrong spouse.  Although this won't affect joint tax liability, associating the penalty with the wrong individual can mean that the IRS will not recognize the penalty as having been satisfied by the correct individual.

As I mentioned, the IRS treats Form 5329 as a separate tax return.  You should probably file a corrected Form 5329 for your husband showing that your husband received $0 in taxable distributions and was not subject to the penalty, and file a Form 5329 for yourself showing you with the taxable income and penalty.  Otherwise, because there is generally no statute of limitations on penalties calculated on Form 5329, you risk the IRS claiming at any time in the future that you did not report this income and penalty.  Alternatively, you can leave it as is and if the IRS ever in your lifetime claims that you yourself did not report this income and penalty, provide the IRS with explanation then.