Hi all,
Here's the situation:
In FY2022 and FY2023 I made accidental excess contributions to a Roth IRA. In FY2022 it was $660 and in FY2023 it was $4260. I withdrew both excesses in March 2024, which was before the deadline to do so for FY2023 but after the deadline for FY2022. I received a consolidated 1099-R from my broker in November of 2024 showing both removals and a taxable amount of $623 with distribution codes J and P. I understand that I need to amend my FY2023 federal return to include the 1099-R and am in the process of doing so with Turbotax (relatively easy to do) but I am a bit confused about amending my state returns. In 2023, we moved from DC to MD and filed in both "states". Since TT is estimating that I will owe some taxes after amending the FY2023 federal return, I have a few questions:
1) do I need to amend both my FY2023 DC and MD returns?
2) If so, do I need to split the $623 taxable amount or $4952 total in some way between both returns?
3) In March 2024, when I removed the excessive contributions, we were living in MD.
The 2022 excess contribution should have been removed as a regular distribution without earnings since it was after the due date of your 2022 return. You should have received a 2024 Form 1099-R with code J and this will be entered on your 2024 return. Or did you apply the 2022 excess as a 2023 contribution and then removed the excess from the contribution for 2023? Then the 2024 Form 1099-R with code P and J is correct.
Yes, you should amend your 2023 DC and MD returns to check if the taxable income changes. The taxable earnings should be allocated between DC and MD.