Excess 2017 IRA contrib/earnings corrected in 2018 and reported on 2017 tax return is incorrectly being included on my 2018 Form 5329-T.

[Fruitstickers]

In early 2017, I inadvertently contributed too much to my 2017 IRA (it was a traditional IRA that I then back-door converted to a Roth IRA).  I discovered this when I was preparing my 2017 taxes in 2018.   I withdrew the excess contribution and associated earnings prior to the tax filing deadline in 2018.  Following the great instructions I found here in the TurboTax community, I included the distribution and earnings on my 2017 taxes and paid the extra tax on that return. 

Now, in 2019, I received a 2018 1099-R for this activity, but the form appears correct (no tax withheld; Distribution code PJ).   I am working on my 2018 taxes and TurboTax correctly did not include the distr/earnings on line 4 of the 1040.  Unfortunately, the total (dist + earnings) is being included on line 18 of Form 5329-T and TurboTax is calculating additional taxes owed on line 25 of that form.  I believe this is incorrect since I already included all of this on my 2017 tax return.  Also, the IRS instructions for form 5329, line 18 state that you should enter the excess contrib amount from 2017 Form 5329, line 24 only if line 25 is greater than zero.  But on my 2017 Form 5329 (created by TurboTax), Line 24 and Line 25 are both zero.   

I tried deleting Form 5329, but after walking through my 1099-Rs again, TurboTax recreated the form again, with the same incorrect information.  

In other posts, it said to ignore the 2018 1099-R if the tax withheld is zero and the dist code is PJ, as mine is.  But I didn't know if they meant to delete the 1099-R form.  It seems that would flag my return with the IRS since my brokerage reported this 1099-R to the IRS.

How do I get TurboTax to not report my 2017 excess contrib/earnings as taxable in 2018 on form 5329?    

[dmertz]

Fruitstickers, it seems that you either began your 2018 by transferring in a different copy of your 2017 tax file that had an amount on line 25 of Form 5329 or you explicitly indicated to 2018 TurboTax that you had and excess contribution in 2018 (with you presumably did not because you corrected it before the due date of your 2017 tax return).  Since line 18 of 2018 Form 5329 has an amount equal to the amount in box 1 your your code PJ 2018 Form 1099-R, it seems that you did the latter.  Go back to the Traditional and Roth IRA contribution section, indicate that you opened a Roth IRA before 2018, then remove the entry on the Enter Excess Contributions page.

[Fruitstickers]

Hi...thank you so much for answering my posts (both of them!)   I hadn't thought that I might have pulled in the wrong 2017 Turbo Tax file, but your suggestion prompted me to start over completely.  I created a brand new file in Turbo Tax 2018 and re-imported and re-entered all of my info.  This time everything worked correctly!  I'm still not sure if it was a bug in Turbo Tax or something on my end, but it is such a relief that my tax return is complete and correct now!  Thank you so much for your help.