2020 Excess Roth IRA Contribution

[Julyredbird]

Hello,

I need assistance to create the 1099-R for this year.

My excess contribution to my 2020 Roth was $500 and  earnings $323.45.  I did not have taxes taken out so I can take care of this mistake this year.  

I understand BOX 1:  $823.45

                        Box 2a: $323.45

Now, I am not sure after that.  What codes do I use in Box 7?

Second, I do need to have the correct address for the Payer (Charles Schwab) and their Payer's TIN number...Correct?

Thank you for your assistance!

[Julyredbird]

I have read on other post to use "J" and "P" ....just making sure

[DanaB27]

Yes, you will enter code P and J for box 7.

Yes, need to have the correct address for the Payer (Charles Schwab) and their Payer's TIN number.

1. Click on the "Search" on the top right and type “1099-R”
2. Click on “Jump to 1099-R”
3. Answer "Yes" to "Did you get a 1099-R in 2020?"
4. Select "I'll type it in myself"
5. Box 1 enter total distribution (contribution plus earning)
6. Box 2a enter the earnings
7. Box 7 enter P and J 
8. Click "Continue"
9. On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.

[Julyredbird]

Thank you DanaB27 for your assistance!  I called Charles Schwab and received the correct address/TIN.  Thank you again!

[Taxn00b15]

Question:   Why would "J" be necessary?  I thought that as long as the excess deferral was corrected by 4/15/2021, all was forgiven.  I assume "J" flags the IRS to give an early distribution penalty.

Since this was a ROTH IRA, should code "B" be added as well?

[DanaB27]

No, code B is for designated Roth (401k Roth) accounts.

Code J is necessary since you have to pay taxes on the earnings from the excess contribution. Only the earnings are in box 2a (taxable amount). 

The IRS states:

"You must include in your gross income the interest or other income that was earned on the excess contribution. Report it on your return for the year in which the excess contribution was made."

@Taxn00b15