1099 R with a P in box 7

[NxH]

I have an IRA. In February 2024, I contributed $7,500 to the IRA with the intention of deducting the amount from my 2023 income on my 2023 return. However, since I had no W-2 income for 2023, I realized in March of 2024 that I needed to have that $7,500 redistributed to me. I received the distribution from the IRA in March of 2024. In June of 2024 I received a payout of $20 to take care of the minor bit of earnings on the $7,500 while the money was in the IRA.  On my 2023 tax return, I did not take the deduction for the February 2024 contribution.

In February of 2025, I received a 2024 1099 R for $7,520, listed in Box 1. The taxable amount in Box 2a is listed as $20, which is the return generated during the time the IRA held the $7,500 in February/March of 2024. So, I input the 1099R on my 2024 return in TurboTax, and I receive a warning that the earnings are for a contribution I made in 2023, so I may need to amend my 2023 return. However, the earnings are for the period in February and March of 2024.

I noticed that if I select 2025 as the year of the 1099R the question goes away, and I assume the $20 income would show on the 2024 return.

So, how do I handle this and get the $20 of earnings reported in 2024? Do I amend my 2023 return for earnings in 2024? If so, how would I report the contribution, and re-distribution of the $7,500 on the 2023 amended return since I didn't contribute it in 2023 nor did i receive the re-distribution in 2023? 

I believe I should report the $20 on my 2024 return. How do I go about doing this? I am over 65, so early withdrawal penalties would not apply. Or is this something I would need to take up with the IRA?

[ThomasM125 · Accepted solution]

Since the contribution was for 2023, you need to report the income in that year based on how the 1099-R is coded. On that amended return, you will enter a substitute Form 1099-R by entering in the information you have on the Form 1099-R you received.

To enter a substitute form 1099-R in Turbo Tax Online follow these instructions:

1. Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
2. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
3. Choose Add (Another) 1099-R
4. Choose I'll type it in myself
5. Choose the source of your 1099-R form
6. Enter your pension income into the Form 1099-R entry screens
7. When you come to the screen that says Do any of these situations apply to you? Check the box that says I need to file a substitute 1099-R and follow the instructions

When asked, answer that the Form 1099-R is for the 2024 tax year.

[NxH]

Thanks for the reply. Three more questions.

1) I am using TurboTax home and Biz. Are the instructions the same for the amended return?

2) Should I just ask the issuing company to revise the 1099 R to a 2024 1099-R and use 8 instead of P in Box 7?

3) Why would I do this? "When asked, answer that the Form 1099-R is for the 2024 tax year." since the substitute form I am filling out on the 2023 return is for 2023? 

Again, I appreciate the help, and the quick answers!

[ThomasM125 · Accepted solution]

The instructions are the same unless you are using the desktop version of the program, if so you can follow these instructions:

To enter a substitute form 1099-R in Turbo Tax Desktop follow these instructions:

1. Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
2. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
3. Choose Add (Another) 1099-R
4. Choose I'll type it in myself
5. On the screen that says Tell Us Which 1099-R You Have choose I need to prepare a Substitute 1099-R

You can ask, but the pension company will not likely correct the form as I believe they reported everything correctly and even if not it is difficult to get them to correct 1099 forms. 

The code "P" says that the distribution is for the year before the one listed on the form. The 1099-R form you get will say 2024, so the code "P" on it will mean the income belongs on the 2023 tax return.