Yes, the interest earned is taxable on the 2016 tax return. If you did not previously include this interest on your 2016 return, then you need to amend your 2016 return to include this additional interest income. The Form 1099R is not entered in the 2016 tax return.
Form 1099R, for 2017 was previously included on your 2016 tax return because of the code "P". Do NOT amend your 2017 return because it will not make a difference.
The instruction to amend your return for 2016 is included below. Be sure to read all the information carefully before you begin so that all of your original figures remain in place for the amendment. Don't forget about your state return.
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