topic What is the deadline for withdrawing 2019 excess Roth IRA contributions? It's normally Oct 15, has it been extended since the april 15th deadline was changed to July 15 in Retirement tax questions

What is the deadline for withdrawing 2019 excess Roth IRA contributions? It's normally Oct 15, has it been extended since the april 15th deadline was changed to July 15

rascle27 — Sat, 24 Oct 2020 18:51:33 GMT

Normally there's a 6 month automatic extension (April 15 ->Oct 15). With the filing deadline going from April 15 -> July 15, does that mean the excess contribution withdrawal automatic extension for 2019 excess contributions is now January 15th 2021?

Re: What is the deadline for withdrawing 2019 excess Roth IRA contributions? It's normally Oct 15, has it been extended since the april 15th deadline was changed to July 15

macuser_22 — Sat, 24 Oct 2020 19:24:18 GMT

No. An excess must have been removed by the due date of the 2019 tax return which was July 15, 2020 for this year because of the COVID-19 delay. IF a timely extension was requested before that due date (of the 2019 return was filed before the due date) then you had until the extended due date (Oct 15, 2020) to remove the 2019 excess without penalty.

(The 6 month extension is from April 15 to Oct 15, the COVID-19 filing delay did not change the extension date.)

If not removed before that due date then a 2019 6% penalty applies to the 2019 excess(reported on your 2019 tax return) but it must still be removed as a normal distribution, not a removal of excess contribution since it is too late to do that. If not removed BEFORE Dec 13, 2020 then ANOTHER 2020 6% penalty will apply and will repeat every year until removed.

Re: What is the deadline for withdrawing 2019 excess Roth IRA contributions? It's normally Oct 15, has it been extended since the april 15th deadline was changed to July 15

rascle27 — Mon, 26 Oct 2020 17:28:37 GMT

How does the automatic extension as per an amended return "Filed pursuant to section 301.9100-2" affect the timetable for an ontime withdrawal of an excess contribution? It states generally that one has 6 months from the due date of the filing of the original return exclusive of extensions. So normally that'd be October 15th (April 15th plus 6 months), however with the due date moving to July 15th this year is the new date 6 months from that date or is July 15th itself considered some form of extension so October 15th holds?

Thanks in advance.

Re: What is the deadline for withdrawing 2019 excess Roth IRA contributions? It's normally Oct 15, has it been extended since the april 15th deadline was changed to July 15

macuser_22 — Mon, 26 Oct 2020 20:25:03 GMT

@rascle27 wrote:

How does the automatic extension as per an amended return "Filed pursuant to section 301.9100-2" affect the timetable for an ontime withdrawal of an excess contribution? It states generally that one has 6 months from the due date of the filing of the original return exclusive of extensions. So normally that'd be October 15th (April 15th plus 6 months), however with the due date moving to July 15th this year is the new date 6 months from that date or is July 15th itself considered some form of extension so October 15th holds?

Thanks in advance.

The "due date" was April 15 and 6 month extension is to Oct 15. The due date was "postponed" per IRS bulletin 2020-17. That did not change the original Oct 15, extended due date, it just made the tax return not late if filed before July 15 - it was "deemed" to have been filed on April 15.

On March 18, 2020, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) issued Notice 2020-17 providing relief under section 7508A(a), which postponed the due date for certain Federal income tax payments from April 15, 2020, until July 15, 2020.

See IRS https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers that directly answers yur question.

Q. I made an excess contribution to my IRA in 2019. Can I avoid the 6% excise tax if I withdraw the excess (and income on the excess amount) by July 15, 2020?

A. Yes, provided you didn’t (or don’t) take a deduction for the excess contribution when you file your tax return. Also, if you file your return by July 15, 2020, and don’t withdraw the excess by that date, you can still avoid the excise tax if you withdraw the excess (and income on the excess amount) by October 15, 2020. See Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs), for details.