Had excess 2023 IRA contribution. Before filing 23 taxes moved excess to 24 reducing 24 contribution to offset. Received 2024 1099R but no distribution. What should I do?

[lewis-cartee]

Who prepared my taxes last year help me determine that moving the excess 2023 contributions to the following year and reducing my 2024 contributions was the path to take. When I received the 1099r this year turbo tax said I needed to amend the 2023. By not taking a distribution, do I need to do this?

[DanaB27]

If you go through your financial institution to apply the contribution to 2024 then they will handle it as a distribution and then new contribution. The earnings from the withdrawal of excess contribution plus earnings are taxable in the year the contribution was made. Therefore, if your 2024 1099-R has code PJ then you will need to amend your 2023 tax return to include the earnings listed in box 2a. Please see How do I amend my federal tax return for a prior year?

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2024?"
5. Enter the 2024 Form 1099-R
6. On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.
7. Click "Continue" after all 1099-R are entered and answer all the questions.
8. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2022" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2023.

Also, make sure you did not pay the 6% penalty on the 2023 Form 5329 since you withdrew the excess plus earnings by the due date. If you did then remove the penalty with these steps in the 2023 return:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. Continue until the penalty screen and enter the excess contribution amount withdrawn.

If you have the 2023 excess contribution carried over to your 2024 return then please follow the steps below and remove the excess in step 5.

For your information, if you want to apply an excess contribution to a future year then you will do this via the tax return and not through the financial institution. But if you use this option you will have to pay the 6% penalty for the year you made the excess contribution.

To apply an 2023 excess Roth IRA contribution as Roth IRA contribution for 2024:

1. Click on "Search" on the top right and type “IRA contributions”
2. Click on “Jump to IRA contributions"
3. Select “Roth IRA”
4. On the "Do you have any Excess Roth Contributions" answer "Yes"
5. On the "Enter Excess Contributions" screen enter the total excess contribution from 2023 (if it wasn't carried over).
6. On the "How Much Excess to 2024?" screen enter the excess contribution amount.

Please see What happens if I made an excess Roth IRA contribution for additional information.

[lewis-cartee]

Thanks you very much for the reply.  
1. Does it make any difference if this is a Trad IRA and not a Roth?

2. Box 7 on the 1099R is P1 for Distribution Code. 

3. Box 2a has 0.00 for the taxable amount. 

[fanfare]

if I read you correctly,  

You intend to treat the amount on the 1099-R Box 1, which is in your account, as  a Traditional IRA contribution for 2024.

Report that contribution, and a) take a deduction, or b) make it non-deductible.

A 1099-R with code P1 and taxable amount zero can be ignored. There is nothing to do. 

@lewis-cartee 

[fanfare]

what is the contribution amount your reported on your original 2023 tax return ?

That number must be wrong.

@lewis-cartee