Turbo tax considers the 8J in Box 7 as 'early distribution'. How do I code that as 'return of excess' as will be reported by my IRA custodian?

[dmertz · Accepted solution]

Codes J and 8 together is correct coding to indicate a return of contribution from a Roth IRA.  This is a special-case use of code J to indicate that the return of contribution was from a Roth IRA and is to be used with code 8 (or P) for any return of contribution from a Roth IRA before the due date of the tax return, even when the distribution occurred after you reached age 59½.

If you were over age 59½ at the time of the return of contribution from the Roth IRA, you must claim an Other reason exception to the early-distribution penalty on the amount shown in box 2a of this Form 1099-R (the earnings).  If you were not over age 59½, you owe the early-distribution penalty on the earnings.

[mskboykin]

Thanks! The taxable amount was under 2.00 and I am over 59 1/2, Where do I claim 'Other Reason Exception' ?

[dmertz]

Other Tax Situations -> Additional Tax Payments -> Extra tax on early retirement withdrawals-> Another reason.
(With only $2 of earnings, the 10% penalty rounds to zero anyway.)

[mskboykin]

Thanks