2022 1099-R received from brokerage for an excess contribution to SEP IRA in 2021 - removed before tax filing deadline in 2022

[claypot2]

I am a self proprietor of an LLC for which I have an SEP. I made an excess contribution to my 2021 SEP. I removed the excess contribution in 2022 before the 2021 tax filing deadline. Because I removed the contribution before I filed my taxes and before the deadline, I entered as my SEP contribution on my 2021 taxes as the allowable amount for 2021 (I did not include the excess since it had been removed prior to filing). Its now time to file my 2022 taxes and I got a 1099-R from my brokerage that shows the amount that I removed in box 1 prior to tax filing deadline for 2021, taxable amount is listed as 0 (box2a) and box 7 shows: 1- early distribution in the first box and in the second box they entered 8- Return of contribution taxable in 2022. I'm concerned that they are telling the IRS that the return was for contributions made in 2022 when in fact it reflects the contributions I made for my 2021 taxes. Do I need to correct this information or did they do it right?

[Anonymous_]

@Mike9241 

[fanfare]

"I'm concerned that they are telling the IRS that the return was for contributions made in 2022 when in fact it reflects the contributions I made for my 2021 taxes. "

Some brokers do it that way even though it contradicts IRS Pub 590A..

See for example TD Ameritrade "removal of excess" form.

You might as well go with the flow and report the positive earnings allocable to your excess on the tax year consistent with your 1099-R.

If you have negative earnings there is nothing to report. taxable.

@claypot2