Excess contribution to Roth IRA

[erinmoody7]

Hi! My husband and I contributed to our Roth IRA in 2025, but after starting our taxes realized our income was too high to contribute. After doing research on how to correct the problem, we withdrew our contributions from 2025 and the earnings. But now, I'm not sure how to report that in Turbotax. Do I try to enter the earnings using the 1099-R section of Turbotax (even though I don't have a 1099-R)? And for the IRA section, do I say that no I haven't contributed to a Roth IRA for the year since I withdrew what I had contributed? I didn't see an option to say that you contributed but then withdrew the funds (only an option if you recharacterized).

Thanks so much!

[ReneV4]

To ensure TurboTax handles this correctly, you should not say no to the contribution question. If you do, the "excess contribution" message will not be triggered.

Since you have now withdrawn the excess contribution, you will need to indicate that by doing the following:

1. Go to the Deductions & Credits section and find Traditional and Roth IRA Contributions
2. Check the box that applies to your Roth IRA, in the "Tell us about your IRAs" section, then Continue
3. Did you open any Roth IRAs in 2024...?", select Yes and Continue
4. When you reach, "Enter your excess Roth IRA contributions made in 2024...", enter the excess, then Continue

By doing this, TurboTax will update Form 5329. It will show the $ was carried over from 2024 but then subtracted because it was withdrawn before you filed your 2025 return. This results in $0 penalty for 2025.

Your Form 1099-R will not arrive until 2027, but you are required to report the earnings in your 2025 return. Here is how to report them now:

1. Go to Income on the left panel within your TurboTax account
2. Click on the +Add more income box
3. Scroll down to Retirement Plans and Social Security and click the down arrow to expand
4. Click Start to the right of IRA, 401(k), Pension Plan Withdrawals (1099-R)
5. Click on +Add a 1099-R, select the Enter a different way box, then Type it in myself
6. On the next screen, you can select Type it in myself, or other options, then Continue
7. Select the box on the top left for Financial institution or other provider (1099-R), then Continue
8. Enter the provider's information, then Continue
9. Enter the details from your Form 1099-R, enter total distribution in Box 1 and only the earnings in Box 2a
10. Ensure the IRA/SEP/SIMPLE box is unchecked
11. Use Distribution Code J & P in Box 7, then Continue
12. Choose Year 2026 as the year on your Form 1099-R
13. Continue until, "Tell us which person may have qualified for a penalty exception" and select the pencil symbol
14. Next, on the, "These situations may lower your tax bill" screen, enter the amount of earnings under, "Corrective distributions made before the due date..."