Excess Roth contribution with drawal after 2 yrs . From 1099-R with Code J. How to show excess withdrawal as non taxable

[Pk841]

For year  2022 I have contributed $6000 for  ROTH IRA  and my spouse started working in the middle of 2022, our combined household income for 2022 exceeded Roth contribution income limit and made me ineligible for Roth IRA contribution.  

I realized this in Jan 2024 and asked my brokerage to remove the contribution of $6,000 as it's excess contribution. They removed $6,043 as excess  and generated a form 1099-R for 2024 in Jan 2025 with  Roth IRA distribution of  $6,043 with Code J,. When I called them they said they can only specify Code J as they don't keep track of excess removals requested after 2 yrs and asked me to work with CPA.

Now my CPA, put this excess withdrawal of $6,043 as taxable income in 4b of 1099. I keep asking him to remove it from 4b as it's non taxable income and only $43 gains have to be taxed.

I also CPA to generate form 5329 and show only $43 as taxable from distributions. My CPA is saying Code J is not allowing their system to report $6,043 as non taxable.

Any advice on how I could show only $43 as taxable in 4 b in 1099 and not have entire 6,043 taxable? Even though 1099-R has code J can I use form 5329 and put only $43 as taxable in 4b) of 1099?

[Pk841]

Also I have paid fine for years 2022 and 2023 for excess Roth contribution

[dmertz]

"Now my CPA, put this excess withdrawal of $6,043 as taxable income in 4b of 1099"

That's wrong.  Only $43 should be on line 4b.  It seems that the CPA failed to include the $6,000 of Roth IRA contribution basis on Form 8606 line 22 to be subtracted from the $6,043 distribution.  Your CPA needs to correct this (and should not charge for correcting the mistake).

Form 5329 Part I should show a 10%, $4 penalty on the $43 (I assume that you are under age 59½) and Part IV should show the $$6,043 distribution being subtracted from the $6,000 excess, eliminating the excess.

[Pk841]

Thank you ! @dmertz  How do I report this 6,043 in TurboTax online and make only $43 taxable on both Federal and NJ state tax returns. I can't find a way to do it in Turbotax online and entire 6,043 shows as NJ taxable and Federal returns shows 0 as taxable

Also I don't see form 5329 getting generated in my preview on Turbotax online. Please assist