Greetings:
When filling out my tax return, I listed a max contribution to my Roth IRA. I filed the return, and it has been accepted by the IRS.
I found out on Thursday (4/14) that I am not eligible to make that max contribution that I recorded on my tax return. Do I need to amend my return and resubmit? If yes, do I also need to amend my state form. I live in Missouri.
Thanks for reading.
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Yes, it seems that you will have to amend your 2021 federal and state returns.
If you have an excess contribution and reported it then TurboTax calculated the 6% penalty for excess contributions.
To avoid the 6% tax on excess contributions, you must withdraw:
If you plan to withdraw the excess plus earnings then you will have to amend your 2021 tax return to not pay the penalty.
Also, you will get a 2022 Form 1099-R in 2023 with codes P and J for the withdrawal of excess contribution and earnings. This 1099-R will have to be included on your 2021 tax return and you have two options:
To create a Form 1099-R in your 2021 return please follow the steps below:
Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2020" you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2021.
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