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Samosa
Returning Member

How to report Re-characterized IRA contributions

In September 2019 I contributed $2K to traditional IRA and $4K to Roth IRA. In March 2020, I re-characterized my 2019-traditional-IRA contributions as Roth contributions. This re-characterization was done before submitting the 2019 tax return, so on 2019 tax return my 2019 contribution was reported as $6K Roth contributions.

In January this year, my custodian issued "2020 form 1099-R": Distribution code mentioned in box 7 is “R”. Per instructions, code R means “Recharacterized IRA contribution made for 2019 and recharacterized in 2020.”

I am preparing my 2020 tax return via TurboTax to file today, Oct 15th. I imported 1099-R into TurboTax, it specifically asked,

"Look at the year on your Form 1099-R. Does it show 2020 or 2021?"

 

Since the 1099-R says "2020 Form 1099-R", I selected 2020.

 

TurboTax then tells me "It looks like you may need to Amend your 2019 Return. Here is why: Your 1099-R reports earnings on a contribution you made in 2019. This information needs to go on your 2019 return."

 

I contacted the person who prepared my 2019 tax return, he says "Those 2020 forms are related to your 2020 tax returns, I don’t believe they will have an impact on your 2019 taxes."

 

Could you please help me figure out whether I should file this form with 2020 tax return, or should I Amend 2019 return to file this form? Thanks so much for your help!

3 Replies
fanfare
Level 15

How to report Re-characterized IRA contributions

You don't have to do anything, because you did not take any deduction for Traditional IRA contributions for 2019.

Samosa
Returning Member

How to report Re-characterized IRA contributions

So I just ignore the "2020 Form 1099-R"?

fanfare
Level 15

How to report Re-characterized IRA contributions

You don't have to do anything about your 2019 tax return.

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