Roth IRA excess contributions

Forum|Forum|3 years ago
March 24, 2023
20 replies
78 views

I filed my 2022 return on February 24, 2023. A week or so later, I realized I was not eligible to contribute to my Roth IRA in 2022 due to the income limits. On March 13th I withdrew all my 2022 contributions plus earnings (or losses, in this case). In my original return, I did not report my 2022 contributions at all. My question is, do I need to go back and amend my 2022 return to report the contributions and withdrawal, or is an amendment not necessary?

Not A Product Question

DanaB27

Employee Tax Expert

No, you do not need to amend your 2022 tax return, since you removed the excess contribution you do not need to enter the Roth IRA contribution.

Generally, any earnings returned with the excess contribution for 2022 belong on your 2022 return and would be taxable.

But since you had a loss when you withdrew the excess contribution then all TurboTax will do is add an explanation statement why you returned the excess contribution when you enter a 2023 Form 1099-R for the return of excess contribution with a loss. Therefore, you don't have to report a taxable event.

If you want to add the 2023 Form 1099-R with codes P and J for the return of excess contribution (with loss) to your 2022 return then please follow the steps below:

Login to your TurboTax Account
Click on the "Search" on the top right and type “1099-R”
Click on “Jump to 1099-R”
Answer "Yes" to "Did you get a 1099-R in 2022?"
Select "I'll type it in myself"
Box 1 enter total distribution (contribution minus loss)
Box 2a enter $0
Box 7 enter J and P
Click "Continue"
On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.

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RMSch1061Author

Level 2

Thank you for the reply. To be clear, when you say "If you want to add the 2023 Form 1099-R with codes P and J for the return of excess contribution (with loss) to your 2022 return," does this mean adding the 2023 1099-R to my 2022 return is optional?

@DanaB27

DanaB27

Employee Tax Expert

In your case, you don’t have any taxable earnings to report because you had a loss therefore your return won’t change when you enter the 2023 Form 1099-R with codes P and J (which you will get in 2024). All that TurboTax would do is add an explanation statement but this wouldn’t be a reason to amend your 2022 return but some people prefer to show the return of excess contribution and add the explanation statement.

@RMSch1061

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