2023 Excess Roth IRA contributions

[jlquest]

I have been following the threads on this issue, creating a substitute 1099-R, put contributions plus earnings in box 1, earnings in box 2a, codes J and P in box 7.  This all worked great for my federal return, but my NJ state return is taxing the entire amount (contribution and earnings).  Turbo Tax says this is because code J is in box 7.

Is there a way to fix the NJ return so only earnings are taxed?

[DanaB27 · Accepted solution]

You will need to include the excess contribution amount in the contribution amount previously taxed during the NJ state return:

1.  On the “You've Finished Your New Jersey Return” click “Update” next to “Adjustments”
2. Continue until you get “IRA Information” screen:

• If this is the first year of withdrawal then select “Yes, this was the first year of withdrawal from this IRA” enter your contribution (including the excess contribution for 2023) next to “Total of IRA contribution previously taxed”
• If you withdrew funds before 2023 then select "No, I've made withdrawals from this account before" and click “Continue” and enter on the “IRA Withdrawal” screen your contribution (including the excess contribution) for 2023 next to “Taxable Contributions Made to IRA during 2023”

[jlquest]

Thanks, that helped a lot.

The NJ return now shows only the earnings from the withdrawal as income and not the contribution.

However, on final check, I get the following message:

Check this entry:

Pensions, Annuities and IRAs Wks- TP: Part A, Line 4A and Part A, line 4b should not both be entered.

Line 4a First year of withdrawal from IRA:

Enter the total of IRA contributions previously taxed                                     contains the contribution amount

Line 4b  After first year of withdrawal from IRA (from Part B, line 7)            contains a zero.

Can I go ahead and submit the return as is, or is there a way to correct this message?

Thanks.

[DanaB27]

Please go back to the State interview to clear entries to correct the error:

1.  On the “You've Finished Your New Jersey Return” click “Update” next to “Adjustments”
2. Continue until you get “IRA Information” screen.
3. Select "No, I've made withdrawals from this account before" and click “Continue”
4. Make sure all fields are blank
5. Click “Back”
6. Select “Yes, this was the first year of withdrawal from this IRA”, verify that the contribution amount is still entered next to “Total of IRA contribution previously taxed” and click “Continue” 

[jlquest]

Hi,

I have made sure the fields on the "No" screen are blank.

I am still getting the same "Check this entry" message on Final Check showing a zero in line 4b.

I took the additional step of deleting the 1099-R form and re-entering it, thinking this would clear any previous entries.  I then went through the Federal and NJ forms again.

I am still getting the same "Check this entry" message on Final Check showing a zero in line 4b.

Are there any other steps I can take?

Thanks.

[DanaB27]

When I tested it in TurboTax Online the error disappeared after making sure the “IRA Withdrawal” screen is blank. 

It would be helpful to have a TurboTax ".tax2023" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Online: 

1. From the left menu select Tax Tools. 
2. Then select Tools below Tax Tools. 
3. A window will pop up which says Tools Center.  
4. On this screen, select Share my file with Agent. 
5. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
6. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

[jlquest · Accepted solution]

Hi,

Upon re-executing your original instructions, I did receive the "IRA Withdrawals for You" screen.

When I changed the 4 input fields from zero to blank, the error was cleared.

Thank you very much for your help!!