Help with how to report IRA non-deductible contribution if removed before tax deadline

Forum|Forum|3 months ago
April 4, 2026
1 reply
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My wife made a contribution to her traditional IRA in 2025 that we came to learn was non-deductible because of a retirement account she was covered by at work we weren't aware of.

We removed the contribution from her IRA in early 2026 as a "removed of excess contributions" in Vanguard, moving it to her brokerage account. She wasn't elegible to recharacterize to Roth because our income is above the limit, and we decided to not do a conversion to Roth because she has some $ in her traditional IRA for previous years and we didn't want to deal with the pro-rata tracking.

My question: Now that we are working on our taxes, should we report her contribution? My hunch is yes, because the contribution did happen and I expect her to get a 1099-R next year for the removal. But seeing some conflicting information on some forums were folks say we can say she didn't contribute because the contribution was removed.

Thanks for the help! My brain has been spinning for hours.

Best answer by MaryK4

Because you removed the contribution before the tax deadline, the IRS essentially treats it as if it never happened for that tax year. You will have to report the earnings (if any) on your 2025 return but you will not receive the 1099-R until 2026. You can enter it now so that you do not have to amend your return next year:

Enter a 1099-R for the one you will receive next year NOW and ignore it when you get it next year. The 2026 1099-R you will receive next year (that you are entering now) will use:

Box 7 code P
Box 1 is the total withdrawn (excess PLUS earnings).
2a is the earnings portions only.
Choose 2026 for form year
You will be prompted to enter an explanation at the end of the 1099-R interview.
The earnings will show up on Line 4b and the explanation statement will show a ''Return of IRA Contribution Before the Due Date of the Tax Return''.

MaryK4Answer

Level 15

Enter a 1099-R for the one you will receive next year NOW and ignore it when you get it next year. The 2026 1099-R you will receive next year (that you are entering now) will use:

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tanchocoAuthor

Level 2

Very helpful! Thanks!

I saw in another thread you had answered to do this, and asked about what to do with the form I would receive next year, but you just answered it :). Ignoring it it is!

On the explanation, that's something I should do this year right? As next year I won't even enter the 1099-R in the first place.

Now hoping I hear from my custodian what the earnings where to know what to mark as earnings before April 15 to get it done without an extension.

MaryK4

Level 15

Correct, if you file it once you have the amount it saves you from having to amend next year. For this, even if it did add it next year, TurboTax would just tell you that you have to amend 2025! @tanchoco

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