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Level 1

Need help with $6500 Excess Contribution made in 2017. Amending 2017 Return but "P" Code is indicating "Taxable in 2016."

TurboTax says I need to amend my return for 2017.  The Code P is saying that they were taxable in 2016.  They didn't earn earnings until 2017.  My 2017 contributions were reversed before the filing date in April, 2018. 

Update:  I did amend my 2017 return as I understand that I am supposed to in order to report the earnings.  The 2018 1099R that I received in 2019 has the Code PJ.  When I entered this code into my Amended 2017 tax form, "P" now stands for Taxable in 2016, which I don't think is right, but I didn't change the Code.

Any help is appreciated.

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Accepted Solutions
Level 8

Need help with $6500 Excess Contribution made in 2017. Amending 2017 Return but "P" Code is indicating "Taxable in 2016."

When you enter your Form 1099-R when Amending your 2017 Tax Return, the code "P" will say "taxable in 2016"; however, in the next step, you should be asked if this is a 2017 or 2018 1099-R.  When you choose "2018", the year advances by one. 

Note: Code "P" is always one year before the issue year on the 1099-R.

If you need further assistance regarding this issue, please comment below.

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2 Replies
Level 8

Need help with $6500 Excess Contribution made in 2017. Amending 2017 Return but "P" Code is indicating "Taxable in 2016."

When you enter your Form 1099-R when Amending your 2017 Tax Return, the code "P" will say "taxable in 2016"; however, in the next step, you should be asked if this is a 2017 or 2018 1099-R.  When you choose "2018", the year advances by one. 

Note: Code "P" is always one year before the issue year on the 1099-R.

If you need further assistance regarding this issue, please comment below.

View solution in original post

Level 1

Need help with $6500 Excess Contribution made in 2017. Amending 2017 Return but "P" Code is indicating "Taxable in 2016."

Thank you, Rachel!  I do have some follow-up questions if you are available.  I put them in a new question, but here is what I wrote if you have the time:

2016:  I contributed $6500 to my Roth IRA in February, 2017, for Tax Year 2016, which was an excess contribution which was withdrawn in January, 2018.  I just received that 1099R in 2019. I have amended my 2016 return and reported the excess contributions and I am assuming I have to pay a 6% penalty on that contribution because it was not withdrawn by April, 2017.  There are two 2016 5329's for my husband and myself with Lines 23 and 24 having $6500 each.

2017:  I also contributed $6500 during the year of 2017, which was also reversed in January, 2018, and I am amending my 2017 return and reporting the withdrawn contributions and earnings and paying a 10% penalty on the earnings.  My husband did the same but is over 591/2, and so no 10% penalty for him. Since I withdrew the 2016 $6500 before the tax filing in 2018, I am unsure if that goes on my amended 2017 taxes.  I already have a distribution of $6500 for 2017 taxes on a different 1099R with earnings that I am putting there. Forms 5329 have $6500 on Lines 18, 20, and 21 in Part IV.  Two Forms 8606 for my husband and me have $6500 on Lines 19, 21, and 22.  

2018:  I contributed $542 to my IRA Roth in January, 2018, but those were reversed later that month with the earnings.  I reported the $6500 Distribution from January, 2018, on my 2018 Return which was the initial 2016 contribution.  On the 5329, Lines 20 and 21 have $6500 each, and on the 8606, Lines 19 and 21 and 22 have $6500.

Question 1: am correct in Amending my 2016 taxes and paying the 6% penalty in that return for not withdrawing by April, 2017?

Question 2: do I pay a 6% penalty in the 2017 Return for the 2016 contribution even though it was withdrawn before the tax filing date of April, 2018?

Question 3: Are the 5329 and 8606 Forms for all three years filled out correctly to reflect all this?
Many thanks for your help and assistance!