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Redan54
Level 2

Withdraw Excess Roth IRA Contributions, considered a distribution or not?

Just making sure, that if it & earnings are withdrawn within the same year (this year, before Wed) then its not classified as a distribution and all the "did u have any early distributions this year" questions are NO right? And in the future when it asks if u had any early distributions in the past 5 yrs already, this incident is not classified as a distribution to be reported as that and only reported as excess contribution everywhere?

4 Replies
macuser_22
Level 15

Withdraw Excess Roth IRA Contributions, considered a distribution or not?

If timely returned before the due date (or extended due date if a timely extension is filed) and any earnings are also returned then of this was a 2019 excess removed in 2020 the distribution will be reported on a 2020 1099-R next January.    The returned contribution will not be taxable but any earnings will be taxable in the tax year that the contribution was for, not the year returned.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Redan54
Level 2

Withdraw Excess Roth IRA Contributions, considered a distribution or not?

@macuser_22so it will be considered as a distribution then?

 

This also happened like in 2018.. and it was withdrawn before April 15, 2018 too... so when I get this question "Distribution from Your Roth IRA Before 2019?" is this YES or NO? I did not get money any other time other than for excess contribution in the history of this Roth IRA.

 

Then on "Do You Have any Excess Roth Contributions" screen for "Your Excess Roth IRA Contributions for Prior Years" ... is this talking about EVER in the history of this Roth IRA or is it really asking do I have any CURRENT Excess? 

I mean if it is talking about EVER then I still mention my Excess from 2018 if I already withdrawal it in 2018? Or is this page only asking about Excess Contribution that has not been withdrawn yet and was carried over and therefore "current excess" which I don't have atm as long as I withdraw the excess from this year before Wed? (I answered it both ways to see what happens, if I answer Yes and put in the previous excess that I already withdrawled that year, I'm getting penalized the 6% I think... so I think the real question they're asking if I have any current excess before 2019)

 

Sorry I hope what I'm trying to ask is more clear this time, thanks for the response 🙂

 

macuser_22
Level 15

Withdraw Excess Roth IRA Contributions, considered a distribution or not?

It is unclear just what you are entering in which interview ans exactally what question is being asked.   Are you entering a 1099-R, a contribution, or what?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Redan54
Level 2

Withdraw Excess Roth IRA Contributions, considered a distribution or not?

sorry, it's the Roth IRA Deduction/Credits section for 

Retirement and Investments
    

Traditional and Roth IRA Contributions. 

 

It asks about stuff before 2019.

 

For the "Distribution from Your Roth IRA Before 2019?" screen, do I answer Yes or No...the only distribution I had was for excess back in 2018...

For the "Do You Have any Excess Roth Contributions" screen for "Your Excess Roth IRA Contributions for Prior Years" ... is this talking about EVER in the history of this Roth IRA or is it really asking do I have any CURRENT Excess?

Back in 2018, I had Excess and I withdrawled it before April 15, 2018 already. That is the only thing I have withdrawled from this Roth IRA in the past but it was already "settled" in 2018, or do I bring it up again.... I see if I indicate I have Excess again, I'm penalized at the 6%, so I'm assuming it is asking about Current Excess from previous years, which would be none in my case if that is what it is really asking.

 

I guess the basic question is: As long as I withdraw excess within the same year, it is not reported as "excess" or "distribution" in future years, right?  Does excess questions in future years only mean if it was carried over & not withdrawn in year the excess occurred then?

 

I have the same issue again this year, will be withdrawling excess tomorrow.

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