1099-R Code P

[druss75]

I have received a 1099-R with a code P.  Turbo Tax is indicating that I must ammend my 2019 return.  I am wondering if this is really necessary, here is why.  I contribured $6000 to my IRA and Roth in 2019.  Due to a bank error, some recharacterization was done, resulting in 7000.00$ being transfered around.  Thus, the bank issued me the 1099-R stated in box 1 that 1000.37 gross distrubution, and in box 2a that 0.37 as taxable amount.  Seems strange to have to ammend a previous year over 0.37 cents. Please advise if I should ammend 2019 return as instructed?  Thank you.

[ThomasM125]

You probably don't need to amend the return since the taxable amount of the distribution is listed in box 2, and it won't affect your income tax. So, the IRS should not assign additional income to you for 2019.

The worse that would happen is you would get an invoice from the IRS assessing additional tax, to which you could respond with a copy of the 1099 form proving that you reported your income correctly in 2019.

[dmertz]

The $0.37 of income taxable on your 2019 tax return rounds to $0, so there is no need to amend.

[druss75]

Thank you for responding.  Your help is much appreciated.  I have not ammended before.  Is it easy or complicated.  If it is easy, maybe I should just ammend it and not have to worry about any further inquiries in the future?

[druss75]

This makes a lot of sense to me.  Thank you for responding and for your assistance.  Is it easy or complicated to ammend last years return?  Should I just go back and put it in to be safe? I appreciate your help. 

[druss75]

Also, is there some kind of penalty for contributing more than $6000? Do I need to worry about that? That is what the P code indicates to the IRS is that I contributed more than the $6000 allowed.  Which is not accurate in this situation.

[dmertz]

You didn't contribute more than $6,000.  The $0.37 is earnings, not contribution.  You had $6,000 of contribution returned, accompanied by $0.37 of earnings.