Excess contributions to Roth IRA and distribution in same year 2021

[taessler]

Hey everyone, I could not find any answers on the community about this and Turbotax Live Support did not know the answer, I appreciate your help.

I contributed $6,000 to my Roth IRA in 2021 ($500 a month), but in December of 2021 realized my income exceeded the income limit to contribute to a Roth IRA. Later in December 2021 I made a distribution of the contributions and earnings, which were $6,148.75. The funds were returned to my savings account (not an IRA) in late December 2021. (I have had my Roth IRA for less than 5 years, and am under the age of 59.)

I received a 1099-R in January 2022.

When I go to add my 1099-R to Turbotax it asks "Did you get a 1099-R in 2021"? I did not, I got it in 2022.

Do I click "No" and add this 1099-R when I go to file my 2022 taxes? (The year on my 1099-R is 2021.)

Or, do I file this with my 2021 taxes? (When I tried this, it changed my federal refund from $1,943 to me owing $600, and the dates in the questions were all referring to before 2021, which makes me think I file this with my 2022 taxes.)

[DanaB27 · Accepted solution]

Yes, you will file the Form 1099-R with your 2021 tax return because it is a 2021 Form 1099-R. When you get to the  "Did you get a 1099-R in 2021"? screen answer "Yes".

Did you request a return of excess contributions plus earnings with your financial institution? Because only the earnings should be taxable and your 1099-R should have codes J and 8 in box 7.

Did you have prior year contributions in the Roth IRA? If yes, then please make sure you enter the net contributions prior to 2021 on the "Enter Prior Year Roth IRA Contributions" screen.

1. Login to your TurboTax Account 
2. Click on "Search" on the top and type “1099-R”
3. Click on “Jump to 1099-R” and enter all your 1099-Rs
4. Click "Continue" on the "Review your 1099-R info" screen
5. Answer all the questions and make sure you enter the net contributions prior to 2021 on the "Enter Prior Year Roth IRA Contributions" screen
6. Answer the remaining question.

[taessler]

Thanks DanaB27!

You are right, box 8 should be there. There was a mistake during the distribution process that caused the form to not have box 8. I am working with my financial institution to fix the form. Appreciate your help!