2024 Roth IRA excess contribute withdrawn in 2025 before filing deadline

[Usser12345]

If excess Roth IRA contribution is withdrawn in kind to a brokerage account what form should I expect from the Roth IRA account. When should I receive it? The contribution was made before December 2024 but the move was made in 2025 prior to filing deadline.  Is the dividend reported on 2024 filing or 2025?  Do I report the excess and then the withdrawal?

[DavidD66]

You will get a 2025 Form 1099-R  in 2026 with codes P and J for the withdrawal of excess contributions and earnings. This 1099-R will have to be included on your 2024 tax return and you have two options:  

• You can wait until you receive the 2025 Form 1099-R in 2026 and amend your 2024 return or
• You can report it now on your 2024 return and you won't have to report the 1099-R when you receive it in 2026 unless there is tax withholding reported in box 4 and/or Box 14.  If tax is withheld you will have to report the Form 1099-R on your 2025 tax return since tax withholding must be reported in the year occurred.  The 2025 code P will not your 2025 tax return's income, but the withholding will be applied to 2025 tax.

To report the 1099-R on your 2024 return, you will have to create a Form 1099-R in your 2024 return.  To do so in TurboTax Online:

1. Login to your TurboTax Account 
2. Click on "Topic Search"
3. Type "1099-R”  in the "I'm looking for" box
4. Answer "Yes" to "Did you get a 1099-R in 2024?" or click on
5. On the "Lets Import your tax info" Click on the box with "Change how I enter my form"  or Add a 1099-R
6. Select "I'll type it in myself"
7. Click on the box with "Financial Institution or other provider (1099-R)" and click on Continue
8. Fill out the information for your financial institution
9. Box 1 enter total distribution (contribution plus earning)
10. Box 2a enter the earnings
11. Box 7 enter J and P
12. Click "Continue"
13. On the "What year is on your [Financial Instituton] 1099-R" screen indicate it is 2025
14. Click "Continue" after all 1099-R are entered and answer all the questions.
15. 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".

[Usser12345]

Thank you for the fantastic response. 

My only point of confusion is that if I file 1099-R in 2025 (for tax year 2024) is that Box 7 code P says "Return of contribution taxable in 2023". Seems like this might be the wrong code given that this is for 2024. Is the code a problem?

[DanaB27]

Yes, code P will say in the drop-down menu "Return of contribution taxable in 2023" but you can ignore that since the follow-up question mentioned in step 13 will tell TurboTax that it will be taxable in 2024.