I overcontributed to Roth in 2020 but removed the excess amount

[LawnJawn]

I'm hoping for some step-by-step instructions in the Turbotax interface.

[DanaB27 · Accepted solution]

Please make sure that you enter your Roth contribution into TurboTax and then enter the amount of excess contribution withdrawn:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “IRA contributions”
3. Click on “Jump to IRA contributions"
4. Select “Roth IRA”
5. Continue until the "You Currently Have a Penalty" screen and enter the contribution amount withdrawn (no earnings)

To clarify, you removed the excess contribution and earnings in 2021?

If yes, then you will get a 1099-R 2021 in 2022 with codes P and J. This 1099-R will have to be included on your 2020 tax return and you have two options: 

• You can wait until you receive the 1099-R  2021 in 2022 and amend your 2020 return or
• You can report it now in your 2020 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 2021 1099-R into the 2021 tax return since the withholding is reported in the year that the tax was withheld. The 2021 code P will not do anything in 2021 tax return but the withholding will be applied to 2021.

To create a 1099-R in your 2020 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2020?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2 enter the earnings
8. Box 7 enter P and J 
9. Click "Continue"
10. On the "Which year on Form 1099-R" screen say that this is a 2021 1099-R.

If you removed the excess and earnings in 2020 then enter the received 1099-R by following these steps:

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R”

[LawnJawn]

Thanks for the detailed reply. Yes, I had removed the excess and earnings in 2021.

[LawnJawn]

@DanaB27  I followed the steps and got to this question in Turbotax. Which box should I check?

Do any of these situations apply to you?

I need to file a substitute 1099-R
The corrected box is checked on this 1099-R
None of these apply

[DanaB27]

You will check "None of these apply". 

Using a substitute 1099-R might prevent you from e-filing, therefore please use "none of these apply".