2021 1099-R Box 7 Code PJ

[GreenDoor11]

Hi,

I've exceeded the IRA limit for 2020 then withdrew the excessive amount in January 2021. However the withdrawal wasn't reflected on the 2020 1099-R form since I did it too late. But, I created a dummy 1099-R then included and reported the excessive amount on the 2020 return. 

For 2021 return, my IRA company sent me a 1099-R with the code PJ in the  Box 7 for the excessive contribution. Since I've already reported the excessive amount in the prior year's return should I still put the code PJ in the Box 7 or should I use something else like P or J instead? 

[FangxiaL]

If there is no income tax withheld on the 1099-R form, you don't enter it on your 2021 tax return. Keep it with your other tax documents. 

[GreenDoor11]

I have a withheld amount of $16 on the excessive IRA 1099R form..... I should report it right? and with code P or J? 

[MinhT1 · Accepted solution]

You should enter the 1099-R on your tax return to have the benefit of the tax withheld. 

You should enter both codes P and J. P meaning Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2020 and J meaning Early distribution from a Roth IRA, no known exception. You will not be taxed again on the earnings but will get the benefit of the tax withheld.

[rand90210]

So I have a similar situation, where I received a 1099-R in 2022 for excess contribution in 2021.  It is coded J,P.

The excess was $4,773.35 on box 1 and 16.  Box 2a Taxable amount shows $0.   

Since there is no taxable amount am I required to amend my 2021 tax return to handle 1099-R ?

[SharonD007]

It depends. If you reported the excess Roth IRA contribution and withdrawal on your 2021 tax return, you would not have to amend your 2021 tax return. If you did not report your contribution and withdrawal, you will need to amend your 2021 tax return. 

To amend your 2021 tax return, follow the detailed instructions in the TurboTax Help article How do I amend my federal tax return for a prior year? For additional information on filing an amended return, please review the TurboTax Help article Amending Your Income Tax Return.

[ehgustn99]

I have a similar question. I have contributed 6000 to my Roth IRA for year 2021 on Feb 2022 and 2500 to year 2022. The case is my contribution limit for Roth IRA for 2021 was 0 (no taxable income).  So before the tax due date for 2021, I have requested excess contribution moved to year and the excess to my regular account. This lead to two 1099-R being generated, one with CODE PJ (3500) and one with CODE J(2500).  For Filing 2022 tax purposes, and amending 2021 (Filed with all 0's) In this case, would my contribution to 2021 be $3500 and the 1099-R with PJ code will be attached to it so it marks that overall $0 for 2021 contribution?

[DanaB27]

No, you don't enter the Roth IRA contribution during the IRA contribution interview on your 2021 return since you removed all of it before the due date. But you will need to enter Form 1099-R with codes P and J on your 2021 amended return (if you didn't enter Form 1099-R with codes P and J when you filed it). The earnings in box 2a will be taxable and subject to the 10% early withdrawals penalty if you are under 59 1/2.

It seems you requested a regular distribution for the 2022 excess since you got Form 1099-R with code J. For the withdrawal of the 2022 excess contribution plus earnings in 2022, you should have gotten Form 1099-R with codes J and 8.

@ehgustn99 

[rand90210]

I'm finalizing my taxes and still struggling with how to handle this.  On my 2021 taxes I did not report any contributions to a Roth or Traditional IRA. In early 2022 I withdrew the overcontribution from the Roth IRA and it generated a 1099-R for 2022 tax year with PJ codes.  When I select those codes on my 2022 taxes to report this 1099-R I get:

Code J - Early distribution from a Roth IRA

Code P - Excess contribution/deferrals taxable in 2021.

So my question is do I really need to amend my 2021 tax return considering my 2022 tax return clearly shows the Excess contribution/deferrals taxable in 2021?   

If I need to amend 2021 tax returns, what exactly do I amend?  Do I just need to show the Roth IRA contribution on the 2021 tax return?

[DanaB27]

Yes, you will need to amend your 2021 tax return. The earnings in box 2a are taxable on your 2021 tax return.

You will need to enter the 2022 Form 1099-R with codes P and J on your 2021 amended tax return:

1. Click "Federal Taxes" on the top and select "Wages & Income"
2. Click "I'll choose what to work on"
3. Scroll down and click "Start" next to "IRA, 401(k), Pension Plan (1099-R)" 
4. Answer "Yes" to the question "Did You Have Any of These Types of Income?"
5. Enter Form 1099-R
6. On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.
7. Click "Continue" after all 1099-R are entered and answer all the questions.
8. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" if you are over 59 1/2 (if you are under 59 1/2 click "Continue")

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2020" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2021.