Fixing Roth Excess Contribution

[mredlinger]

I cannot find the answer to my situation.  I made an excess contribution to Roth in 2024.  After filing my taxes I discovered the error.  I have since removed the excess contribution and income generated by it in 2024 through my brokerage.  Here is the catch.  When going back to amend my filed return I discovered that I never entered into the return that I contributed to a Roth account.  I'm assuming, though, that I need to report the income generated by my Roth contribution.  But I don't know where to enter that in the amended return.  Any thoughts on how to handle this situation?

[DanaB27]

You do not need enter the Roth IRA contribution in the IRA contribution interview if you withdrew the contribution plus earnings.

If you made an excess contribution in 2024 and withdrew the 2024 excess Roth IRA contribution plus earnings in 2025 before the due date, then you will get a 2025 Form 1099-R in 2026 with codes P and J. This 1099-R will have to be included on your 2024 tax return and you have two options:  

• You can wait until you receive the 2025 Form 1099-R in 2026 and amend your 2024 return or
• You can report it now in your 2024 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. Then you must enter the 2025 Form 1099-R into the 2025 tax return since the withholdings are reported in the year that the tax was withheld. The 2025 code P will not add anything to your income in the 2025 tax return but the withholdings will be applied to 2025.

To enter a 2025 Form 1099-R in your 2024 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2024?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning)
7. Box 2a enter the earnings
8. Box 7 enter J and P
9. Click "Continue"
10. On "Is the IRA/SEP/SIMPLE box on this 1099-R checked?" screen answer "No, the box is blank"?
11. On the "Which year on Form 1099-R" screen say that this is a 2025 Form 1099-R.
12. Click "Continue" after all 1099-R are entered and answer all the questions.
13. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2023" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2024.

[mredlinger]

Thanks.  Before seeing your answer, I was told to do it differently.  I was told to go to "miscellaneous income" then "other" and enter the income from the withdrawn Roth with an explanation as to the source of the income coming from the excess contribution withdrawn.  That is what I did.

At this stage I think I've messed it up enough.  Important thing is to have paid the tax owed.