How to Report Excess Roth IRA Contribution 2024 and 2025

[Ford9]

I retired at the end of 2023 and completely spaced on the fact that I would no longer contribute to my Roth. I contributed the max 8000 allowed for me in 2024 and got an early start and contributed 3000 in January for 2025. The light bulb came on when I started my 2024 taxes. I contacted my broker and removed the excess amounts both for 2024 and 2025 (I don't anticipate earned income this year), plus they removed the income on those amounts. Reading through other questions, I can't find anything that fits this exact situation, but it looks like I can manually enter a diy 1099 for the excess contribution income, then will receive a "real" 1099 next year. My question is when entering this in on my taxes, do I only list the excess 2024 contribution / distribution and income for 2024 (8000+income)? And then address the excess 2025 contribution on my 2026 taxes? But if I do that, won't the "real" 1099 I receive at the start of 2025 show the total income received during 2025 based on the total I actually received (11000+income)?

[DanaB27]

Yes, the earnings for the excess contribution made in 2024 will be reported on your 2024 return (2025 Form 1099-R with codes PJ). The earnings on the excess contributions made in 2025 will be reported next year on your 2025 return (2025 Form 1099-R code 8J).

If you made an excess contribution in 2024 and withdrew the 2024 excess Roth IRA contribution plus earnings in 2025 before the due date, then you will get a 2025 Form 1099-R in 2026 with codes P and J. This 1099-R will have to be included on your 2024 tax return and you have two options:  

• You can wait until you receive the 2025 Form 1099-R in 2026 and amend your 2024 return or
• You can report it now in your 2024 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 2025 Form 1099-R into the 2025 tax return since the withholdings are reported in the year that the tax was withheld. The 2025 code P will not do anything to your income to the 2025 tax return income but the withholdings will be applied to 2025.

To create a Form 1099-R in your 2024 return please follow the steps below:

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. 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 J and P
9. Click "Continue"
10. On "Is the IRA/SEP/SIMPLE box on this 1099-R checked?" screen answer "No, the box is blank"?
11. On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.
12. Click "Continue" after all 1099-R are entered and answer all the questions.
13. 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 2023" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2024.