2024 1099-R form received with distribution code P showing 0 taxable amount. Do I need to amend my 2023 tax return?

[augburto]

Hello,

I received 2 1099-R forms from my bank this year. In 2024, before 2023 tax deadline, I tried rolling over a traditional IRA into a Roth IRA  but realized I would not get the 1099-R form in time, so I ended up filing a removal of excess. This happened within the span of a few weeks so no taxable income (confirmed on the form). Not long after in that same year, I decided to go forward with putting the same money in and then properly rolling it over to a Roth IRA.

The first 1099-R form I received shows the first amount I put in and shows 0 taxable amount and distribution code P. In TurboTax Desktop software it says I will need to amend my 2023 return for this.

My 2nd 1099-R form shows what I was expecting -- the amount I rolled over into a Roth with distribution code 2. Turbotax Desktop software handled this correctly. 

Question: I looked around I have had mixed answers of whether or not I actually need to report the first 1099-R form because I had 0 taxable amount. I've read I don't need to but I've also read you may need to amend and report even if its 0 taxable amount because it counts as a distribution. I called my bank and they could only confirm that they purposefully meant to issue both 1099-R forms and one is not a correction of the other. How would I go about amending a 2023 return? The link for amending 2023 return that Turbotax shows goes to a broken link.

Thank you so much.

[augburto]

Okay I believe I figured it out -- if a tax expert wants to confirm, feel free.

Code P indicates "Excess contributions plus earnings/excess deferrals taxable in 2023."meaning it's reporting an excess contribution made in a previous year that you are taking out. The reason you typically amend is if you took a deduction for the previous tax year for that excess contribution you now need to amend your previous tax return so you don't get the deduction (after all it was excess and you're taking it out for that reason).

The second reason you may need to amend is if during the time in between if you made any capital gains on the excess contribution. That would also be a reason to amend your old tax return so that the capital gains can be reported appropriately (this would naturally show up as taxable amount on your 1099-R form)

Had I taken a deduction on this in my previous year tax return and/or made capital gains, I would have to amend. You can confirm if you took a deduction by looking at your previous year's tax return Form 1040 Schedule 1. I am not a tax expert.

[DanaB27]

Yes, this is correct. Since you didn't have any taxable earnings with the return of the traditional IRA contribution you do not have any additional income to report on your 2023 return. You also didn't claim the deduction. Therefore, you have no reason to amend your 2023 return.