I was 70 in February 2018. I made a small IRA contribution in the first quarter of 2018. Why am I being told I have a penalty? I was not 70 1/2 until August?

ransomsese · ‎June 1, 2019

macuser_22 · ‎June 1, 2019

Sorry, but you need to have that contribution returned by the IRA custodial as a "return of excess contributions", not as a normal distribution.

You cannot contribute to a Traditional IRA at all *in the year* that you turn 70 1/2.

If not removed by the due date of the tax return, it will be subject to a 6% penalty that repeats every year that it remains in the account.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

View solution in original post

macuser_22 · ‎June 1, 2019

Sorry, but you need to have that contribution returned by the IRA custodial as a "return of excess contributions", not as a normal distribution.

You cannot contribute to a Traditional IRA at all *in the year* that you turn 70 1/2.

If not removed by the due date of the tax return, it will be subject to a 6% penalty that repeats every year that it remains in the account.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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I was 70 in February 2018. I made a small IRA contribution in the first quarter of 2018. Why am I being told I have a penalty? I was not 70 1/2 until August?