ROTH 1099-R code T on excess contribution

Forum|Forum|4 years ago
January 31, 2022
1 reply
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When doing my 2019 taxes, in 2020, at age 59.5, I opened and funded a ROTH IRA. $7000 for 2019 and $7000 for 2020.

In late 2020 my employer offered a volunteer retirement package for those 60+ and I took it. The package put my income over the ROTH threshold, so I had to pull the $7000 out of my ROTH for 2020, which was done in February 2021. The $7000 was never invested, interest accrued would have been $3.70 - but I did not include it when withdrawing the $7000.

I used Vangard's online process to move $7000 from the ROTH to my brokerage account. I contacted Vanguard and was told since I used the online process, they cannot go back to make any changes.

My 1099-R shows $7000 with a distribution code of T, taxable amount not determined. TurboTax is showing the $7000 as taxable income. I have searched Turbotax help, I have read and read, but I'm still unsure of what to do.

Thanks for any advice!

Best answer by DanaB27

Please follow these steps to enter your 1099-R:

Click on the Search box on the top and type “1099-R”
Click on “Jump to 1099-R” and enter your 1099-R
Click "continue" after all 1099-R are entered
Answer all Roth questions in regards to the Roth carefully. You will be able to enter your net contributions prior to 2021.

Since you had enough contributions prior to 2021 the distributions of $7,000 won't be taxable. You can verify your entry on line 4b taxable should be $0. For your information, you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free.

To preview Form 1040:

Click on "Tax Tools" in the left menu
Click "Tools"
Click "View Tax Summary" in the Tool Center window
Click on "Preview my 1040" on the left

DanaB27Answer

Level 15

Please follow these steps to enter your 1099-R:

Click on the Search box on the top and type “1099-R”
Click on “Jump to 1099-R” and enter your 1099-R
Click "continue" after all 1099-R are entered
Answer all Roth questions in regards to the Roth carefully. You will be able to enter your net contributions prior to 2021.