@jnpatla wrote:
It was requested 4/12/19 but returned on 4/18/19
Since the 2017 contribution was not returned until 2019 then it was after the Oct 15, 2018 cut off date to have a return or contribution and a code P. A regular distribution code would be correct.
You would owe a 6% penalty for 2017 on the amount of the excess. It is unclear from your post as to just how much of, or all, your $6,500 contribution was in excess. Only that amount in excess is subject to the 6% excess contribution penalty. It was not necessary to remove the entire contribution if only part was in excess.
Because the excess contribution was not removed and you must pay the 6% penalty on an amended 2017 tax return, the earnings do not need to be removed. The $6,500 2019 distribution will be taxable as an ordinary distribution on your 2019 tax return. You should be receiving a 2019 1099-R in January of 2020 with a code 1 in box 7 if you are under 59 1/2 or code 7 if you are 59 1/2 or older.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
