Excess Contribution to Roth IRA

[topielec]

In January 2021, I contributed $6000 into my Roth IRA for the 2020 year.  I realized I exceed the limit for contributing. I requested an excess contribution withdrawal and received the money in February 2021.  The  earnings computed were $448.31.  I received a total of $6,403.48.  I was told I would receive a 1099-R in January 2022.  My question is do I need to report anything on my 2020 tax filing or would this be reported in the 2021 tax year since I contributed the money in January 2021?  Thank you. 

[DanaB27 · Accepted solution]

You will get a 1099-R 2021 in 2022 with codes P and J for the withdrawal of excess contribution and earnings . This 1099-R will have to be included on your 2020 tax return and you have two options: 

• You can wait until you receive the 1099-R  2021 in 2022 and amend your 2020 return or
• You can report it now in your 2020 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. Then you must enter the 2021 1099-R into the 2021 tax return since the withholding is reported in the year that the tax was withheld. The 2021 code P will not do anything in 2021 tax return but the withholding will be applied to 2021.

To create a 1099-R in your 2020 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2020?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2a enter the earnings
8. Box 7 enter P and J 
9. Click "Continue"
10. On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.