Roth IRA contribution that wasn't eligible

Forum|Forum|6 years ago
January 26, 2020
9 replies
83 views

Hi All,

I had made a contribution to my Roth IRA in 2018 which wasn't eligible as I make over the limit in my wages. I found this out while working on the taxes for 2018 and withdrew the money before April 2019. I also didn't do anything with it so there was no interest or earnings from it. I called the IRS and they said that I would only need to mention that the contribution wasn't eligible.

Now when I am working on the 2019 taxes I have my 1099R. I entered the two fields from box 7 which are P (Return of contribution taxable in 2018) and J (Early Distribution from Roth IRA). After I went through the next option it mentions that I will be paying extra tax on this money. Can someone help me out as to what letters need to be entered to get this processed correctly? I assume I have to also contact my financial institution to get this correct on the 1099R.

Thanks

DanaB27

Employee Tax Expert

No, you do not need to get the 1099-R corrected. If you haven't already included this withdrawal of contribution on your 2018 tax return then you will have to amend your 2018 tax return to included this 1099-R: How do I amend a 2018 return in TurboTax?

The P-code in box 7 stands for "Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2018". Therefore, you will need to include this 1099-R in your 2018 tax return. When you amend your 2018 tax return enter the 1099-R as shown. TurboTax will ask you "Which Year on Form 1099-R?" after entering the 1099-R; select 2019 and TurboTax will know to include it in your 2018 taxes.

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niko6266Author

Level 2

Thanks for the reply. Even though the 1099-R is for 2019 I have to include it in the 2018 filings? Prior to filing my 2018 taxes I had called the IRS and they mentioned to me that when I received the 2019 1099-R that I would just mention "a withdraw contribution that wasn't eligible in 2018" and that would be enough. I'll give them a call tomorrow and confirm.

Thanks for the help

JFRAHER

Level 7

As @Dana827 mentioned this is properly included on your 2018 return.

If you haven't already included this withdrawal of contribution on your 2018 tax return then you will have to amend your 2018 tax return to included this 1099-R: How do I amend a 2018 return in TurboTax?