How do I show that I'm withdrawing from Roth IRA early but only withdrawing contributions (not earnings) - therefore not taxable?

[AnnetteB6]

You need to include the basis of your Roth IRA in TurboTax in order for the program to know that you withdrew only contributions.

After you enter your Form 1099-R, there should be some follow-up questions to go through.  One of those questions will ask about Prior Year Roth IRA Contributions.  This is where you should enter the amount that had been contributed to the account.  

If you do not see those follow-up questions, then go to Deductions & Credits > Retirement and Investments > Traditional and Roth IRA Contributions.

This will bring you to a screen with checkboxes to indicate what types of accounts you had in 2025.  Be sure that Roth IRA is checked.  Click Continue.  

If Traditional IRA is checked or if you have a spouse that had either type of account, the next questions will not pertain to your Roth IRA.  Continue through this section until you are asked whether you made any contributions to your Roth IRA for 2025.  This is the beginning of the section where you will enter details about your Roth IRA, including the basis.  

Continue answering the questions according to your situation.  On the screen where you see Let Us Track Your Roth IRA Basis, click Yes.

Then on the screen titled Enter Prior Year Roth IRA Contributions, this is asking for your total contributions for years prior to 2025 (basis).  If your basis exceeds your distribution, then the distribution will not be taxable.  If the distribution exceeds your basis, then the excess will be taxable.

[user17704002862]

I withdrew $12k (all contributions) as I have contributed well over $50k over two decades. I put the $50k number in as my contributions, yet there was no change in the fact that Turbo Tax continues to show I owe $400 for this withdrawal. I've pulled up 8606 and not sure what I'm entering wrong that is causing Turbo Tax to keep taxing this withdrawal. Any suggestions at this point?

[RogerD1]

What code is in Box 7 of the 1099-R that you received for this distribution?  A code J would be for an early distribution (under age 59.5 years old).  After you enter the details of your Roth IRA, you will answer questions about, whether it has been open for 5 years or not, if you have made withdrawals in prior years, when you opened it and so on.  You'll get to a screen that says Roth IRAs which asks for the Roth IRA contributions prior to 2025 - enter the amount in that field for your contributions.  Then if your 1099-r Box 7 code is J and your contributions exceed your withdrawal, this will not be taxable.

If you have additional details about your Roth IRA withdrawal that I missed above, please provide those - especially the Box 7 code on the 1099-R

[user17704002862]

Thank you so much for your reply. I've read a lot about this issue and I think I've done what you've asked.

My 1099-R was a J code. Do I need to get that changed by my brokerage? I've had a Roth for about 20 years now and have contributed well over the $12k I withdrew.

I mark that I had a Roth.

Was the contribution a repayment? (No)

Were you military? (No)

Enter your regular Roth contributions. (only $665 last year as I began moving funds to a 403b)

Did you re-characterize any Roth contributions? (No - just withdrew some)

Did you open any Roth IRAs in 2024 or any previous year? (Yes - about 20 years back)

Did you withdraw from your Roth before 2025? (No. First time.)

What were your Roth IRA contributions prior to 2025? (This seems where I'd show my basis of contributions is well beyond the $12k I withdrew. I put $20,000 - much less than I've actually contributed, but more than my withdrawal, but it's not changing the $400 tax. I upped it to $50,000 to see what that would do and it changed nothing.)

Did you convert a traditional to a Roth before 2025? (No.)

Did you contribute more than allowed in 2024 or any other year? (No.)

It sure seems that the question about my Roth IRA contributions prior to 2025 should be the answer that shows the $12k was all contributions, but it's not changing anything. I'd love to know where I've gone wrong here. Thanks so much!

[DavidD66]

Can you clarify something - exactly where are you seeing the $400 tax?  Based on your answers above, it sounds like you've done everything correctly.

[user17704002862]

Prior to the entry of the 1099-R I was receiving a Federal Refund of $344. Once the 1099-R was entered I now owe $56 (a difference of $400). If I delete the 1099-R and didn't report it, I'd be back to the $344 refund (obviously not a good plan). My verbiage of a $400 tax might be off, but the net result is ($400). Again, thanks so much for considering this with me.

[RogerD1]

It doesn't sound like you should owe tax on this distribution based on the information you've given.  Are you seeing additional taxes reported on Schedule 2, line 8 for additional tax on IRA?  Or is the $400 difference showing up somewhere else?  If you can find where it is showing up the 1040 form or Schedule 2, that may be helpful in determining what might be happening here.

If you are using the Online version, you can do a preview of your return as follows:

1. Once you are logged in and have your 2025 return open, go to the left side menu and scroll down to Tax Tools
2. Click on Tools, and then click on Preview my return in the pop up that shows up.
3. Click Preview my 1040 on the left side menu and you can scroll through to see where this additional tax is being entered on your return.
4. Once you are done previewing, you can click on Back on the left side menu to return to your return preparation.

If using the download version of TurboTax, the tax forms can be found by clicking on Forms on the blue banner at the top right of the TurboTax window.

[user17704002862]

First off, you are a tax wizard. Thank you for perfect directions. Very interesting - I took a quick screen shot of the Tax Summary and when I enter the $12k it reduces my "Total Payments" from $14,610 to $14,210 ($400). Then I went through the 1040 as you asked and I found the $400. Apparently when I enter the $12k it reduces my Additional Child Tax Credit by $400 (Line 28). Why would a Roth IRA withdrawal of untaxable contributions reduce that credit? And again, thank you so much!

[DaveF1006]

To see exactly what happened, look at your Form 1040, Line 28 and compare it to Schedule 8812:

1. Check Form 8606: Open the "Forms" view in your software and look for Form 8606, Part III.
2. Line 22 should show your "Basis" (the $12k or more).
3. Line 25b (Taxable amount) should be $0.
4. If Line 25b has a number in it, the software thinks you withdrew "Earnings," which are taxable and will reduce your credits, including the Additional Child Tax Credit
5. Check for Form 5329: If you see this form in your return, it means the software is charging you a penalty (the 10% early withdrawal penalty or the 6% excise tax). This might be where your $400 went.

To remedy this:

1. Go to the Deductions & Credits tab, find Retirement and Investments, and select Traditional and Roth IRA Contributions.
2. Follow the screens until it asks: "Enter your net Roth IRA contributions prior to 2025."
3. Enter the total amount of money you have ever put into your Roth IRAs.

Once the software sees that your "Basis" is higher than your "Withdrawal," that $400 should reappear in your refund.

[user17704002862]

Thank you for the very helpful and detailed instructions. I've been using the Online version and I'm struggling to determine how to access the forms you're referencing. I've researched viewing forms and I keep finding (as late as 2024) that the online version doesn't allow a person to view the form unless they pay to print. Thus, I'm not able to actually see the forms you're suggesting. Is there a workaround for this? Has that changed in the 2025 version? I click on Tools and can access Delete a form, but there is no viewing - just a trashcan to click to delete the form without being able to view it first.

While I appreciate your suggestions to remedy, I believe I've already done that to no avail. I can go to the section that will inform form 8606, but when I enter my contributions prior to 2025 as $50k (well over what I withdrew), nothing changes. Until I simply delete this 1099-R entirely, I've not found how to get back the $400. 

Am I missing something in your directions? I've tried to read them closely and ensure I'm not missing something. I've attached a screen shot of the question where I entered my $50k.

Thank you for your time.

[DaveF1006]

Here is how you can "see" those forms without paying, along with why entering that $50k hasn't fixed your refund yet.  Look in the left-pane of your return. There should be an option labeled Preview my 1040. Once there, compare:

1. Line 4b (Taxable amount): Is there a number here? If yes, the software is treating your Roth withdrawal as taxable income.
2. Line 28 (Additional Child Tax Credit): Is this lower than you expect?
3. Schedule 2, Line 8: Is there a number here? That is the 10% penalty.

Now, here is how to correct this.

1. Delete the Forms: Go to Tax Tools > Tools > Delete a form. Delete Form 1099-R, Form 8606, and any IRA Withdrawal Worksheets.
2. Verify the Refund: Your refund should jump back up to where it was before the withdrawal was entered.
3. Enter Basis FIRST: Go to Deductions & Credits > Traditional and Roth IRA Contributions. Step through and enter your $50k "prior year contributions" first when the question asks what your Roth contributions were prior to 2025
4. Re-enter the 1099-R: Now, go back and enter your 1099-R. When you get to the follow-up questions, it should "find" that $50k basis you just entered and realize the withdrawal is $0 taxable.

[user17704002862]

I appreciate the suggestion. I feel like I followed your suggestions exactly as you wrote them. I did go back and delete all IRA forms (1099-R, Form 8606, and any IRA Withdrawal Worksheets). That indeed did restore my $344 federal refund.

I then clicked on Deductions and Credits FIRST and started the section concerning IRAs.

Did you contribute to a Roth IRA in 2025? (Yes)

Was the contribution a repayment of money you previously took out of a retirement plan? (No)

Enter your regular Roth IRA contributions. ($665 only - I just started funding a 403b this year)

Did you re-characterize any of the Roth IRA contributions for 2025 over to a traditional IRA contribution? (No)

Did you open any Roth IRAs in 2024 or any previous year? (Yes - years ago)

Do you want to track your Roth IRA basis? (Yes)

Did you withdraw from your Roth IRA before 2025? (No)

What were your Roth IRA contributions prior to 2025? ($50,000)

Did you convert a traditional IRA to a Roth IRA before 2025? (No)

Did you contribute more to a Roth IRA than was allowed in 2024 or any previous year? (No)

THEN, I went back to Wages and Income

Did you get a 1099-R in 2025? (Yes)

I uploaded the pdf version of the 1099-R and immediately my federal refund reduced from a $344 refund to owing $56 (a $400 difference).

Box 1: $12,000

Box 2: Empty

Taxable Amount not Determined - Checked

Distribution Code - J 

Every other line was either blank or 0. Do I need to talk with my investment advisor to have them change my 1099-R? At this point, I'm thinking there is a glitch in how Turbo Tax is addressing this. I feel I've clearly assigned a basis of contributions well over the $12k that I withdrew ($50,000). Not sure how to proceed at this point. Any other suggestions?

[RogerD1]

Once you uploaded the 1099-R, did you go through the remaining screens of the 1099-R interview and answer all the questions that popped up? (such as the "Do any of these situations apply to you?", "Did you roll over all . . .", etc.).  You'll often see refund amounts in TurboTax change right after a form is imported, but the refund will go back up once all the questions following that form are answered.

Are you getting any errors when you do a Federal Review on your return?  This may be helpful to determine what might be going on.

As you mentioned, you have enough basis in contributions ($50,000) such that you can withdraw $12,000 from the account without incurring any taxes on it.