I made an excess contribution of $1,000 to my Roth IRA for 2022 in April 2023, but because my income was too high contacted Fidelity who refunded me the money in April 2023 before the tax filing deadline. I did not report the contribution to my Roth IRA on my 2022 taxes.
In 2024, I received a 2023 1099-R with information in the following boxes: Box 1 Gross Distribution $1,000; Box 2a Taxable Amount $0.00; Box 4 Federal Income Tax Withheld $0.00; Box 7 Distribution Code 8J (and IRA/SEP/SIMPLE is NOT checked). All other boxes are empty. I am 31 years old.
Explanation Statement Entered on 2023 Tax Return:
Withdrew excess contribution with no earnings before the due date of return
I filed my 2023 taxes and input the 1099-R and no penalties were assessed on my return form 5329. I do not have a form 5329 on my 2022 taxes.
My understanding is if you remove the excess contribution before the filing deadline of the tax return and there are no earnings then it is a non-taxable event and you don't need to worry.
Here is what is on my form 5329 for 2023:
Line 18: $1,000
Line 19: $4,260
Line 21: $4,260
Line 25: $0 Additional Tax (Because I withdrew the funds with no earnings timely?)
Am I good now? No action needed? Thank you in advance for the help.
