I contributed $6500 to Roth IRA in 2023, but only made $3500. Filed excess contribution with Fidelity which will generate 1099 in May. How do I handle 2023/2024 returns?

[Malaga1]

I have not filed my 2023 taxes yet. Wasn't sure which tax year deals with excess contribution. Excess contribution form filed Feb 28, 2024.

[DaveF1006]

First, as you will report that you intend to return the excessive contribution back in your return.  Here go to federal>deductions and credits>retirement and investments>Traditional and IRA Contributions. Scroll the the screens until you reach a screen telling you you have a penalty. Here you will report the excess contribution you will return by the due date of the return. 

Now you need to report the return of the distribution. I would suggest reporting the withdrawal of the excess contribution on your 2023 return in the following manner.

1. Open (continue) return if you don't already have it open.
2. Inside TurboTax, search for 1099-R and select the Jump to link in the search results.
3. Answer Yes on the Your 1099-R screen,
4. Click on the box that you are creating a substitute 1099-R
5. Then select Continue.
6. In order to create a substitute 1099-R, you will need to obtain and name, address, and payer TIN as required so you can record the information properly on the form. You may need to contact Fidelity for this information or perhaps you can get information from their website.. 

The codes you will need for box 7 are J and P. Since this is a Roth IRA the only amount that is taxable are any earnings on the excess contribution. 

You will receive a 1099-R for the withdrawal in 2024 you do not need to report the information since you have reported it on your 2023 tax return.