My wife made a contribution to her Roth IRA and later we realized we weren't eligible. We got a 1099-R, how do I tell TurboTax this withdrawal was simply a refund?

[frankvgi2]

The contribution was made in error since we weren't eligible, so the money was withdrawn.  Both dollar amounts are the same.  How do I flag the 1099-R entry so I don't get taxed on it as an early withdrawal?

[DanaB27]

Your 1099-R should have code 8 and J if the 2020 excess contribution and earnings was withdrawn in 2020. If you withdrew a 2019 excess contribution and earnings then your 1099-R will have code P and J and you will have to amend your 2019 return to include this 1099-R.

Did you tell your bank that this was a withdraw of excess contribution and earnings?

Please be aware, you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free.  Please answer the Roth follow-up questions after you entered the 1099-R.

Please follow these steps to enter your 1099-R:

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R”
3. Click on “Jump to 1099-R” and enter your 1099-R
4. Answer all questions
5. On the “Review your 1099-R info” screen click "continue" after you entered all 1099-R to get to more Roth follow-up questions.

[frankvgi2]

Thank you, I believe you are right, that contribution/withdrawal was for 2019 but made in March of 2020.  It was done via my Financial Advisor and did have J and P on Line 7.  I'll circle back with them and make the updates accordingly.