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Level 1

Should I only use code P (instead of JP) in box 7 on 1099R for earnings on an excess contribution to my Roth IRA if I am over 59 1/2 since it is not an early withdrawal?

I contributed to my Roth IRA in 2017, but did not know I was ineligible since I am now retired. I know I have to put 1099R info for the 2017 earnings on the excess contribution even though I won’t get the official 1099R until 2018. Since I am over 59 1/2, I am unclear if I should use codes JP in box 7 for the earnings in box 2a or should I just use P since J means it is an early withdrawal. It is not an early withdrawal after 59 1/2 is it? And in 2018 when I get the official 1099R do I have to do something with it on my 2018 taxes?

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Accepted Solutions
Level 20

Should I only use code P (instead of JP) in box 7 on 1099R for earnings on an excess contribution to my Roth IRA if I am over 59 1/2 since it is not an early withdrawal?

NO.  The "J" is required to say that it is a Roth.  See below for what to do if over 59 1/2.

*IF* you requested a return of contributions due to an excess contribution and the excess was removed before the extended due date of the 2017 tax return and the earnings were also returned and you know that the IRA custodian will report this as a return of contribution and not as a normal Roth distribution - then:

You can just report it now and ignore the 1099-R when it comes.

You would enter the 1099-R with the total distribution in box 1 (the contribution plus the earnings),

The earnings in box 2a,

Enter code "P" in box 7 (Top) - don t worry that it will say "taxable in 2016 "

Enter code "J" in box 7 (Bottom).

On the "Which year" screen say that this is a 2018 1099-R.

After the 1099-R summary screen press continue.

If you are over 59 1/2 then on the "Lets see if we can lower your tax bill" enter the box 2a amount in the "Another Reason" box to eliminate the 10% early withdrawal penalty on the earnings.

Enter the explanation for the excess contribution and that you are reporting a 2018 1099-R on your 2017 tax return to avoid having to amend in 2018.

The box 2a earnings will be taxable income reported on line 15b on the 1040 form and if under age 59 1/2 will also be subject to a 10% penalty on a 5329 form that will be reported on line 59 on the 1040 form.

6 Replies
Level 20

Should I only use code P (instead of JP) in box 7 on 1099R for earnings on an excess contribution to my Roth IRA if I am over 59 1/2 since it is not an early withdrawal?

NO.  The "J" is required to say that it is a Roth.  See below for what to do if over 59 1/2.

*IF* you requested a return of contributions due to an excess contribution and the excess was removed before the extended due date of the 2017 tax return and the earnings were also returned and you know that the IRA custodian will report this as a return of contribution and not as a normal Roth distribution - then:

You can just report it now and ignore the 1099-R when it comes.

You would enter the 1099-R with the total distribution in box 1 (the contribution plus the earnings),

The earnings in box 2a,

Enter code "P" in box 7 (Top) - don t worry that it will say "taxable in 2016 "

Enter code "J" in box 7 (Bottom).

On the "Which year" screen say that this is a 2018 1099-R.

After the 1099-R summary screen press continue.

If you are over 59 1/2 then on the "Lets see if we can lower your tax bill" enter the box 2a amount in the "Another Reason" box to eliminate the 10% early withdrawal penalty on the earnings.

Enter the explanation for the excess contribution and that you are reporting a 2018 1099-R on your 2017 tax return to avoid having to amend in 2018.

The box 2a earnings will be taxable income reported on line 15b on the 1040 form and if under age 59 1/2 will also be subject to a 10% penalty on a 5329 form that will be reported on line 59 on the 1040 form.

Level 1

Should I only use code P (instead of JP) in box 7 on 1099R for earnings on an excess contribution to my Roth IRA if I am over 59 1/2 since it is not an early withdrawal?

Thank you! I also made an excess contribution last month for 2018. That was also backed out, but with a loss. When I get the 2018 1099-R will the amount be the 2017 earnings minus the 2018 loss or will I get two separate 1099-R forms? How will I report the 2018 loss on my 2018 taxes since I am reporting the 2017 earnings as you have described above. Since it is a small loss and not subject to taxes can I just ignore it?
Level 20

Should I only use code P (instead of JP) in box 7 on 1099R for earnings on an excess contribution to my Roth IRA if I am over 59 1/2 since it is not an early withdrawal?

I am assuming you meant in your first question that you made a 2017 excess contribution and removed it in *2018*, not 2017 otherwise it would have been reported on a 2017 1099-R that you should already have received by now so you would not be asking about a 1099-R that you will receive in the future in 2019.  Also that 1099-R would not have a JP code if removed in 2017 - it would have a code J8.

If you also made a contribution for *2018* and removed it in *2018*, then you will receive a 1099-R for that in February of 2019 to report the 2018 contribution.  That 1099-R should have a code J8 and would be a separate 1099-R.
Level 7

Should I only use code P (instead of JP) in box 7 on 1099R for earnings on an excess contribution to my Roth IRA if I am over 59 1/2 since it is not an early withdrawal?

Use both codes.  Enter it like this and disregard the '2018' 1099-R when you get it next year since you will already have claimed it in 2017.  

  1. Click on Federal (left)
  2. Click on Wages and Income (top)
  3. Scroll down to Retirement Plans and Social Security
  4. Select 1099-R Start/Edit YES
  5. Select "I'll type it in Myself''
  6. Box 1 gets the full amount and Box 2a get the earnings amount entered
  7. Box 7 will be code P and also enter J (indicates Roth)
  8. Choose 2018 as the 1099 year 
  9. Enter the earnings amount (box 2a) in the 'Another Reason' box on the question of 'Did you use your IRA to pay for any of these expenses?'
  10. For Explanation - enter ''2018 1099-R with Code P (avoiding amendment)'' or something similar

You will have ordinary tax applied to the earnings.

Level 20

Should I only use code P (instead of JP) in box 7 on 1099R for earnings on an excess contribution to my Roth IRA if I am over 59 1/2 since it is not an early withdrawal?

That puts it on line 7.  That is for an employer retirement plan such as a 401(k), not an IRA.
Level 7

Should I only use code P (instead of JP) in box 7 on 1099R for earnings on an excess contribution to my Roth IRA if I am over 59 1/2 since it is not an early withdrawal?

Right, ty.  will update.