1099 R Early Distribution from Roth IRA

[chrisnuge13]

I took an early distribution from my Roth IRA in 2025. I also took an early distribution in 2024 but only up to the cost basis amount of the Roth so it was not taxable. When completing 2025 taxes, turbo tax asks what my basis/previous contribution were to my Roth and is deeming the 2025 early distribution non taxable but that doesn't feel correct. Should I input zero for the previous contributions know that I already withdrew the cost basis amount in 2024? The 1099R is just marked early distribution. 

[MinhT1 · Accepted solution]

Yes, you are correct.

When asked for your prior contributions to your Roth IRA, you should enter your NET contributions (after deduction of your past withdrawals of contributions).

In your case, you should enter 0. Your early distribution of earnings will be subject to the 10% penalty on top of income tax.

[chrisnuge13]

Thank you!

[tafranken123]

Looking for answer to similar question.  I opened Roth in 2005 and had not touched it until 2025 and closed the account.  The 1099R is saying J (early withdrawal) which is correct.  I am only 48 and everything I know says it is taxable but the 1040 thru Turbo Tax says no.  I would love for TT to be correct.  Any advice?  If I change the J to 7 it is fully taxable

[DianeW777]

The distribution of your contributions is not taxable, however the earnings will be taxable income and you must know the amount. It should be the amount in box 2a. If there is a check in box 2b (taxable amount not determined) then you must know your contributions to determine the earnings portion that is taxable. Do not change the code that is listed on the actual 1099-R.

If you withdraw from a Roth IRA after the 5-year period but before retirement age (59 1/2),  contributions are always tax and penalty free. However, earnings are taxable and subject to a 10% penalty because the distribution is 'nonqualified' (age requirement not met), even though the 5-year rule is satisfied.

@tafranken123 

[tafranken123]

Thank you for your quick response.  I understand and agree with you.  However my problem is with having Turbo tax say the same thing.  If I leave the j as the distribution code it is not saying the distribution is taxable.  If I remove the J and make it a 7 (you advised not to do this) it is all taxable not including the contriibution.  I am not a candidate for any of the exceptions.  So how do I convince the program?

[MarilynG1]

A Code J in Box 7 on Form 1099-R indicates an 'Early Distribution of a Roth IRA, no known exception.'  If you don't select any of the exceptions presented, it should be taxable in your return on Form 1040, Line  4b. You could delete/re-enter the 1099-R, and if imported, enter it manually.  Make sure the IRA box is checked. 

You may want to verify your Birth Date in the Personal Info section.

@tafranken123 

[tafranken123]

OK  Thanks for response but still have issue.  Leaving the code J and not marking any of the exceptions is leaving the Roth IRA as non taxable.  Checked birthdate also.  All indications are that it is taxable; just can't get TT program to agree.  Last try for any other suggestion.

[RogerD1]

Go to your 1099-R information in TurboTax.

1. On the 1099-R details screen, there should be a Box 1 amount and a Box 7, code J.  Box 2a may or may not have a taxable amount or the Box 2b Taxable amount not determined box will be checked.  Click Continue
2. The IRA/SEP/SIMPLE box should not be checked - click Continue on this screen and the next screen.
3. You may get a Where is your distribution from? screen to determine state exclusions for the 1099-R income
4. On Do any of these situations apply to you? - none should apply.  Click Continue
5. On Did you roll over . . . you would click I did something else, then Continue
6. Did you withdraw the money to buy your first home? - No I didn't, then Continue
7. Click Done on the Your 1099-R summary screen
8. On the screen asking about disaster distributions, select the correct answer, then Continue
9. You'll get a series of questions asking about the Roth IRA
10. You will eventually get a screen Roth IRAs where you can enter the amount of the contributions to your Roth IRA, then Continue
11.  You will get more questions about your Roth IRA, followed by a Let's see if we can lower your tax bill screen - click Continue
12. You can check for penalty exceptions, by clicking the pencil icon to edit - click Continue if you have no exceptions to the penalty

Taking these steps will make the earnings that were withdrawn taxable, with a 10% penalty on the earnings added to the amount of tax.