Excess Contribution Withdrawal Roth IRA

[pmkstanton]

Hi there! In January 2023 I put $6k into my roth ira (marked as a contribution for 2022). I realized since I got married I couldn't contribute anything so withdrew the $6k PLUS the $144 interest it had earned and marked it as excess contribution (all of this happened in the span of 6 days)

I received two 1099-INT for these for 2023:

$6000 code PJ (taxable amount 0) 

$144 code 8J (taxable amount $144)

My question is do I amend my 2022 return or file this as part of my 2023 return? The bank transactions happened in January 2023 but I deposited the funds and marked them for my 2022 roth contribution so a bit confused which tax year these apply to (or if they both even apply to the same year?)

Thanks!

[DanaB27]

A 2023 Form 1099-R with coded P and J belong on the 2022 return but since you did not have any earnings shown in box 2a you do not have any taxable income to report. You do not need to amend the 2022 tax return.

A 2023 Form 1099-R with codes 8 and J will have to be entered on your 2023 return:

1. Login to your TurboTax Account 
2. Click "Continue" after all 1099-R are entered and answer all the questions.
3. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings from box 2a under "Corrective distributions made before the due date of the return".

Generally, if you made contributions in 2023 for 2023 and returned them in 2024, you should have gotten a 2023 Form 1099-R with codes P and J. Then the earnings in box 2a are taxable in 2023. If this applies to your situation then you might want to check with your financial institution if they will correct the Form 1099-R.

[fanfare]

you should have only one 1099-R with code PJ and taxable amount 144 which goes on your 2022 tax return.

The bank is telling you to put the $144 on your 2023 return instead.

either way, you pay tax on $144.

It's not worth fighting with the bank about it, and it's easier for you to not have to amend your 2022 tax return.

it also saves you from a possible early withdrawal penalty of $14 depending on your age.

Did they do it on purpose ? Let sleeping dogs lie.

you ignore the  PJ 1099-R, and enter the other one on your 2023 tax return.

@pmkstanton