topic Re: Help with Excess Contribution to IRA in Retirement tax questions

Help with Excess Contribution to IRA

RA2021 — Mon, 05 Apr 2021 03:13:11 GMT

I’ve made an IRA excess contribution in 2020, and just withdrew the excess amount. My broker noted that the 1099-R form will be issued in 2022, and I would not receive any additional form this year related to the contribution or the withdrawal.

Could you please let me know how I should report the items noted below in TurboTax:

- Initial contribution

- Excess amount withdrawal

- Earnings on the excess amount

Thanks,

Re: Help with Excess Contribution to IRA

macuser_22 — Mon, 05 Apr 2021 04:15:29 GMT

Have you received the refund plus earnings? What type of IRA - Traditional or Roth?

Re: Help with Excess Contribution to IRA

RA2021 — Mon, 05 Apr 2021 14:17:11 GMT

I have received the refund plus earnings, minus about 10% federal tax on earnings. This is a tradational IRA.

Re: Help with Excess Contribution to IRA

macuser_22 — Mon, 05 Apr 2021 14:47:13 GMT

Then unless you know form the IRA trustee what codes they will put in box 7, you should wait for the 1099-R that might require amending 2020 to report it.. But the tax withheld will be reported on yiur 2021 tax return if it was returned in 2021.

Re: Help with Excess Contribution to IRA

RA2021 — Tue, 06 Apr 2021 06:02:10 GMT

Thanks for the response. IRA trustee noted that I would receive the 1099-R next year. Should I ask them about 1099-R Box 7 and create the 1099-R form myself? The refund for adjustment of the excess contribution and earnings happened in 2021.

Re: Help with Excess Contribution to IRA

macuser_22 — Tue, 06 Apr 2021 14:47:22 GMT

If you requested a return of contributions and earnings then the 1099-R you will received should have a code P on box 7, the returned amount in box 1 and earnings in box 2a with the IRA box checked.

Some trustee are mistakenly using a code 8 instead and tell you to report it on your 2021 return which is incorrect.

And I have seen several posts from customers of one (unnamed) financial institution that just treats it as a normal distribution with a code 1, 2, or 7 in box 7 which makes it all taxable.

Re: Help with Excess Contribution to IRA

RA2021 — Tue, 06 Apr 2021 17:25:04 GMT

Thanks for the clarification. So, assuming IRA trustee will not provide the 1099-R this year, if I want to create the 1099-R form for 2020 filing, do I need to use code 8 or P in box 7 to report it for this year?

The excess amount was contributed in 2020 and has been withdrawn/corrected in March 2021.

Re: Help with Excess Contribution to IRA

RA2021 — Sat, 10 Apr 2021 22:44:20 GMT

macuser_22,

Could you please review the question here?

The excess amount was contributed in 2020 and has been withdrawn in March 2021. Assuming IRA trustee will not provide the 1099-R this year, if I want to create the 1099-R form for 2020 filing, do I need to use code 8 or P in box 7 to report it for 202 return?