Withdrawals of contributions by due date 2

[DanaB27]

“However, for the distribution of excess Roth IRA contributions, report the gross distribution in box 1 and only the earnings in box 2a. Enter Code J and Code 8 or P in box 7"(Form 1099-R instructions).

Please follow steps 11 and 12  from above instructions to get the exception from the 10% early withdrawal penalty. 

Code P only would indicate the return of an excess deferral and list it on line 1h instead of line 4.

[fanfare · Accepted solution]

Exception Code 21 - used on Form 5329, negates the penalty.

It is only distantly related to your distribution code(s) on 1099-R

[mgc6288]

Holy Cow!  I filled out my 1099-R as follows:

1) $3593.80

2a) $93.80

7) J & P

This assessed me the 10% penalty.  I then went to the now known 5329 form which showed line 1 as having the $94 early distribution from the Roth IRA.

I entered $94 under the Column A "Non Simple Distributions" on line U which states "Corrective distributions made before the due date of return" and line 2 automatically filled in code 21 as well as $94.  Penalty reversed.  Sound about right?

@fanfare

@DanaB27 

[fanfare]

Penalty reversed, that's nice.

However, as I stated above, Line 1 should be Zero, since she has prior contributions into her Roth IRA.

when Line 1 is Zero, penalty is Zero.

@mgc6288 

[mgc6288]

I really appreciate both of you contributing to this major headache I've been trying to deal with.  Such a small amount in question but in my mind a big IRS headache.  I wish I could select two solutions for this one.

@DanaB27 - Thank you for at least pushing me to PJ  and then making me aware that I could select 2004 on the next page.  It never dawned on my to at least try it as I assumed it would simply use 2022.  

@fanfare - You've hung in there with me on a few posts over this, thank you.  Your mention of form 5329 really, really helped as I didn't even know of its existence nor see it among all the pages within TT.