Correcting Roth IRA contribution when over income

spowers11 · ‎January 19, 2026

I contributed $1000 in 2023 to a Roth IRA despite being over income. I paid the penalty in 2023 and 2024, but would like to correct this issue now. I have no other IRA accounts and have not contributed anything since. The balance in the account is now $950. I am aware that I should withdraw this full amount from my IRA custodian.

What do I need to file with my taxes this year, given that there were no earnings? Do I need to amend my 2023 taxes if I already filed a 5329 and paid the penalty? I was told by a TurboTax advisor that I needed to amend my 2023 taxes to include a 1040-X, but I don’t see that recommended elsewhere. Thanks!

ThomasM125

You have to file a Form 5329 in the year for which you make the distribution, which is 2025 it seems here. If there were earnings on the account, they should be reported in the year the excess contribution was made, so that is why you were informed that you may need to amend your 2023 tax return.

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dmertz

If you already filed Form 5329 for 2023 and 2024 and paid the 6% excess-contribution penalty for each of those years, there is nothing more to do for those years with respect to the excess contribution, nothing to amend.

If you did not correct the excess in 2025 and you are not eligible to apply the excess as a Roth contribution for 2025, you again owe the same penalty for 2025 by including Form 5329 with your 2025 tax return.

With regard to correcting the excess in 2026, you must obtain an ordinary distribution of exactly the amount of the excess with no adjustment for investment gain or loss. To avoid confusion, make no mention to the Roth IRA custodian that this distribution is to correct the excess contribution that you made in 2023. This distribution will be reported on your 2026 Form 5329 to be subtracted from the excess carried into 2026. Because this is a distribution of contribution basis, it will not be taxable on your 2026 tax return. Assuming that it is a nonqualified distribution, it will be reported on your 2026 Form 8606 Part III whare the $0 taxable amount will be calculated.