topic Do I report Traditional non-deductible IRA contributions that were returned to me the same year? in Retirement tax questions

Do I report Traditional non-deductible IRA contributions that were returned to me the same year?

Chrisgmitchell — Thu, 23 Jan 2025 15:11:00 GMT

In early 2024 I made an $8000 Traditional non-deductible contribution (for the 2024 tax year) to my IRA. Several months later I realized I needed that money back for another important purpose (long story). So this really wasn't a return of an "Excess contribution". The company returned the money to me plus the earnings on that money of $266 and they told me the earnings portion would be taxable. Sure enough when I recently got the 1099-R it correctly showed an $8266 distribution (box 1) but only a $266 TAXABLE distribution (box 2a). My question is when Turbo Tax asks me if I made an IRA contribution for 2024 should I put $8000 or simply leave it blank? I lean towards leaving it blank but not sure. I know IRA companies have to publish a form 5498 and I'm also not sure if they will include that $8000 contribution on that form or not........that form typically doesn't show up until May.

Re: Do I report Traditional non-deductible IRA contributions that were returned to me the same year?

RobertB4444 — Thu, 23 Jan 2025 17:39:23 GMT

You're going to leave it blank. The financial management company has already removed it as a tax-deductible contribution by removing it from the 1099-R. So you don't get credit for a contribution this year.

@Chrisgmitchell

Re: Do I report Traditional non-deductible IRA contributions that were returned to me the same year?

dmertz — Thu, 23 Jan 2025 20:03:48 GMT

As RobertB4444 indicated, in this case you would to omit reporting the $8,000 IRA contribution. Because it wasn't an excess contribution, if you entered the contribution TurboTax would not give you any opportunity to indicate the amount of contribution returned. TurboTax only presents that opportunity when TurboTax determines that you have entered an actual excess contribution.

You must still enter the code-8 2024 Form 1099-R so that the $266 will be properly taxed.