Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Returning Member
posted Feb 27, 2021 10:21:39 AM

Roth IRA excess contributions - How to pay excise penalty for multiple years?

We made ineligible contributions to a Roth IRA in three separate years (2017, 2018, 2019). We removed those contributions and associated earnings in a single transaction in January 2021. How and when do we pay the excise penalty using Form 5329?

 

Will we:

  • Do this just once for our 2021 return, since the distribution income came back to us in 2021?
  • Or do we need to amend returns for all three years, using a separate 5329 for each?

Thanks in advance.

0 1 338
1 Best answer
Expert Alumni
Feb 27, 2021 10:45:26 AM

You will have to amend all 3 years to create Form 5329 and pay the penalty. 

 

Excess contributions are taxed at 6% per year for each year the excess amounts remain in the IRA. 

 

Please see How to amend (change or correct) a return you already filed for instructions.

1 Replies
Expert Alumni
Feb 27, 2021 10:45:26 AM

You will have to amend all 3 years to create Form 5329 and pay the penalty. 

 

Excess contributions are taxed at 6% per year for each year the excess amounts remain in the IRA. 

 

Please see How to amend (change or correct) a return you already filed for instructions.