dmertz
Level 15

Retirement tax questions

No recharacterization of the 2018 contribution is permitted after October 15, 2019.  You'll owe a 6% penalty on the 2018 excess with your 2018 amendment and, since the 2018 excess was still in the account, for 2020 you'll owe another 6% penalty on the 2018 excess shown on your 2019 Form 5329.  If you will again be ineligible for a Roth IRA contribution in 2020 you'll have to resolve the 2018 excess by making a regular distribution of the exact amount of the 2018 excess, with no adjustment for earnings or loss; any earnings can remain in the account.  This regular distribution will be nontaxable because it is a distribution of contribution basis.

 

The excess contribution for 2019 can be resolved by a return of excess contribution before the due date of your 2019 tax return as you mentioned, and must include attributable earnings or loss.