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Excess contribution to roth ira but check received after deadline

 
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1 Reply
JuanOscar
Returning Member

Excess contribution to roth ira but check received after deadline

Normally you are required to indicate the Tax Year the Roth IRA contribution is intended for. So even if the check is received after the deadline it could still be contributed for the Tax Year past the deadline. For example, if you postmarked a contribution for 2017 by April 18, 2018, and was received by your financial institution after April 18 it's possible it could still be counted as a 2017 contribution. 

If it is an excess contribution for 2018 there are a few options available.  

Request an extension to your 2018 taxes and make a withdrawal of the excess amount by October 15, 2019. A withdrawal is not a distribution.  When you withdraw the excess contribution you need to withdrawal any interest that contribution has earned.  Contact your Roth IRA plan administrator for help.

If you have already filed your 2018 taxes, there is a rule that allows you 6 months from the original due date of the return  (October 15, 2019) to withdraw an excess contribution (even if you didn't request an extension). You may need to final an amended federal return and possibly state return once you have made the withdrawal.  Again, your Roth IRA plan administrator should be able to help you.

It's important to fix this otherwise you may be subject to a 6% excise tax as long as the excess contribution is in the account. 

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