Excess Roth Contribuiton in 2023

[masonswork]

My wife was informed that an excess contribution of $280 was never removed from her Roth IRA as she instructed her brokerage account holder to do in 2024.  She told them to immediately removed the excess last week (they told her the penalty will be $17). My question is do I need to amend our 2024 Tax Return or out 2023 Tax Return.  I have already amended our 2024 tax return once as we found a 1099-INT for our daughter that was not previously reported.  Is there another way to pay the penalty other than an amendment?  Can I just wait and see if the brokerage house will be issuing a 1099-R for the excess withdrawal? Thank you!

[DanaB27]

If the $280 excess for 2023 was never removed then you need to pay the 6% penalty on your 2023 and 2024 return. If you didn't have Form 5329 with part IV filled out then you will have to amend your returns. Please see How do I amend my federal tax return for a prior year?

Since you removed the 2023 excess after the due date you should have requested a regular distribution without earnings. You will report the distribution next year on your 2025 return when you get the 2025 Form 1099-R with code J (if you are under 59 1/2).

To add the 6% penalty on your 2024 return:

1. Click on “Jump to IRA contributions"
2. Select “Roth IRA”
3. On the "Do you have any Excess Roth Contributions" answer "Yes"
4. On the "Enter Excess Contributions" screen enter the total excess contribution from 2023.