I withdrew excess SEP IRA contribution for 2020, and 1099-R has code 7 on item 7. How do I add this to Turbo Tax without this event being taxable?

[DaveF1006]

it depends. If you requested to have your excess contribution withdrawn by October 15,2020, then this is not taxable. My suggestion though is to request a corrected 1099R with a code 8 to accurately reflect that your excess contribution was withdrawn otherwise this is a taxable event.

[jgg998]

I have a similar issue. I opened and funded a SEP IRA the end of 2019 and estimated the amount I could contribute before completing my taxes for 2019. I overfunded it and withdrew the excess amount. I received a 1099 R with Box 7 shown meaning it is fully taxable which is not the case.

The broker will re-categorize as an excess contribution but not submit the revised form to IRS until the end of 2020. How do I address this in Turbo tax as the excess should not be taxable?

Thank you for anyone's response. 

jgg998

[macuser_22]

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@jgg998 wrote:

I have a similar issue. I opened and funded a SEP IRA the end of 2019 and estimated the amount I could contribute before completing my taxes for 2019. I overfunded it and withdrew the excess amount. I received a 1099 R with Box 7 shown meaning it is fully taxable which is not the case.

The broker will re-categorize as an excess contribution but not submit the revised form to IRS until the end of 2020. How do I address this in Turbo tax as the excess should not be taxable?

Thank you for anyone's response. 

jgg998

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Were many earnings also returned?    To be a return of contribution, both the contribution AND and earnings attributed to the contribution must be returned.  To report it you must know the 1099-R box 1 and box 2a amounts and the box 7 code.  The returned earnings will be taxable.