If I received a distribution from my Roth IRA but that distribution is less than my contributions for the year, why do I need to fill out Form 8606?

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macuser_22

Alumni - Champ

The 8606 form is how you report to the IRS that the distribution *was* less than your contributions.

**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.**

willinick1Author

Level 2

Thank you very much for the help.

I guess then I'm confused about the Instructions for Form 8606 then (https://www.irs.gov/pub/irs-pdf/i8606.pdf).

Under the Return of IRA Contributions section it looks like it essentially says: if you made contributions and had any returned to you then it is treated as if that contribution never happened and it doesn't need to be reported with the 8606. It would be on the 1040 instead.

Am I reading that incorrectly?

Or is Turbo Tax waiting for the 2019 instructions form to come out to verify it's the same this year?

macuser_22

Alumni - Champ

@willinick1 wrote:

Thank you very much for the help.

I guess then I'm confused about the Instructions for Form 8606 then (https://www.irs.gov/pub/irs-pdf/i8606.pdf).

Under the Return of IRA Contributions section it looks like it essentially says: if you made contributions and had any returned to you then it is treated as if that contribution never happened and it doesn't need to be reported with the 8606. It would be on the 1040 instead.

Am I reading that incorrectly?

No, you are not. A "return of contribution" and a distribution are two different things. A return of contribution is making a new contribution and changing your mind and having it returned before the due date of the tax return for the year that the contribution was made. Any earnings attributed the the contribution must also be returned and would be taxable. The financial institution would issue a 1099-R with a code JP or J8 (depending on the year the contribution was for) in box 7 that indicates a "return of contribution" and the earnings in box 2a.

After the due date of the tax return has passed then and you take a normal distribution then you can always withdraw your own prior contribution tax and penalty free reguardless of age. A normal distribution would have a box 7 code of J, T or Q depending on age. That is reported on a 8606.

**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.**