Clarification on "Any Excess IRA Contributions Before 2020" for previously settled excesses

NotoriousBOG — Wed, 24 Feb 2021 21:35:55 GMT

The screen titled "Any Excess IRA Contributions Before 2020"

asks: "Tell us if you contributed more money to your IRA than was allowed in 2019 or any previous year"

My situation:

in 2019 I contributed $750 more to my Roth IRA than I should have based on my MAGI (I discovered this in Feb 2020 while doing the taxes for 2019)
I withdrew $830 from the IRA in Feb 2020 to cover the $750 basis and the growth on it. I "pocketed" that cash, i.e. I did not recharacterize it or move or transfer it to another IRA.
I reported this disbursement on my 2019 taxes so that I would not have to amend the 2019 taxes while doing the 2020 taxes in 2021. I basically followed option 2 described in this previous answer by @DanaB27 which references @macuser_22's answer
As expected, in January 2021, I received the 1099-R form for 2020 telling me that I disbursed $830 (box 1) and that the taxable amount is ~$82 (box 2a). Fox 7 has codes P and J. All others are empty. These are the same values I entered with my FY2019 taxes with the statement that I was paying for them at the time so I would not have to amend my filing now.

So the question are:

1) am I safe in answering No to the question on this screen based on the fact that all previous excesses are settled.

2) do I do anything with the 1099-R form (my guess is no as that is consistent with macuser_22's answer)

Thank you!

Re: Clarification on "Any Excess IRA Contributions Before 2020" for previously settled excesses

DanaB27 — Wed, 24 Feb 2021 21:50:06 GMT

1) Correct, you will answer "no" to "Any Excess IRA Contributions Before 2020" because you withdrew the the excess contribution (and you had no earnings) by the due date.

2)No, since you entered it on your 2019 return and there are no taxes withheld you do not need to enter it on your 2020 tax return. The code P will not do anything in 2020 tax return.

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Clarification on "Any Excess IRA Contributions Before 2020" for previously settled excesses

Re: Clarification on "Any Excess IRA Contributions Before 2020" for previously settled excesses