2024 1099R - Distribution from Roth

[Moxie55]

In March of 2024, prior to filing my 2023 Year Taxes, I removed $3,500 from my Roth thinking I had excess contributions to my Roth in 2023.  I received a 2024 Form 1099-R showing Box 1 - Gross Distribution of $3,500 and box 16 for State Distribution of $3,500.  Codes J,P.  No other boxes filled in or check-marked.  In March 2024 when the correction was made, I was 59 1/2 so I am not sure why the J code.  Thus, $7,500 less $3,500 means I contributed $4,000 to my Roth in 2023.  It turns out that my reduced contribution limit would have allowed me to contribute $4,289.25. 

I am not sure what I need to do with this 1099-R as it says it is 2024 but the correction was to 2023 year.  do I remove this 1099R from my 2024 Tax Return? Do I need to amend my 2023 taxes?  Do I need to complete Form 5329 to identify for Line 1 that exception 21 applies, but I don't think I would be subject to any penalties so not sure about form 5329. Do I need to amend my 2023 1040 Form - again, not sure what would change here since it is a ROTH so after tax dollars?

Thank you for any further guidance than what I am receiving while doing my taxes online.

[DanaB27 · Accepted solution]

You can remove the 2024 Form 1099-R with code PJ from your 2024 return since you had no tax withholdings.

To clarify, you don't have any earnings in box 2a? You didn't have any earnings when you withdrew the excess contribution?

If you didn't have any earnings in box 2a then you you do not need to amend your 2023 tax return since only the earnings in box 2a would be taxable in 2023.

If you do have earnings listed in box 2a then you will have to amend your 2023 return.

1. Click on the "Search" on the top right and type “1099-R” 
2. Click on “Jump to 1099-R”
3. Enter the 2024 Form 1099-R and continue
4. On the "Which year on Form 1099-R" screen say that this is a 2024 Form 1099-R.
5. Click "Continue" after all 1099-R are entered and answer all the questions.
6. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2022" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2023.

Form 1099-R instructions state: "For the distribution of excess Roth IRA contributions, report the gross distribution in box 1 and only the earnings in box 2a. Enter Code J and Code 8 or P in box 7."

[Moxie55]

Correct, box 2a is blank. 

Thank you for your timely response!