Excess Roth Contributions Over 2 Years

[sullivap75]

I had 2 excess contributions to my Roth IRA in 2020, and 1 excess contribution in Jan. 2021.  I discovered the 6% penalty while doing my 2020 returns and withdrew all the contributions plus earning before filing last year.  I did not report any Roth activity on my 2020 returns as I planned to do an amended 2020 once the 1099-R was received.  Now that I have received my 1099-R with the total distribution, the statement has a code of Q, not a code P for excess contributions.  I am over 59.5 so no penalty for that but I do owe tax on the earnings that were withdrawn in early 2021.  How would I do this in TurboTax?  I am stumped on how to handle this situation.

[DanaB27]

It seems as if your financial institution treated it as a regular distribution. Did you request with them the withdrawal of excess contribution plus earnings? You might have to talk to your financial institute since a 2021 1099-R with code Q would belong on your 2021 tax return but would not be taxable at all since it is a Qualified Distribution.

Please see What happens if I made an excess Roth IRA contribution for additional information. 

[sullivap75]

Thank you for your quick response.  I do have one more question.  What if the excess contributions consisted only of the COVID relief stimulus money?  Does that make a difference?

[DanaB27]

If you are referring to that you made repayments of a COVID retirement distribution in 2020 and 2021 then you do not enter them as contributions. You will enter the repayments in the retirement section.

1. Login to your TurboTax Account 
2. Click on the Search box on the top and type “1099-R”
3. Click on “Jump to 1099-R”
4. If you do not have any 1099-R answer "No" to "Did you get a 1099-R in 2021?" (If you have any 1099-R then enter all 1099-R and after entering your last 1099-R click "Continue" on the “Review your 1099-R info” screen)
5. Answer "Yes" to the "Have you ever taken a disaster distribution before 2021?" screen

You will enter the repayments made before the due date of your 2020 tax return on the 2020 tax return. Repayments made after the due date of the 2020 tax return will be entered on your 2021 tax return. Please be aware, Form 8915-F for the 2021 tax return isn’t ready yet. Once the section is available follow these steps above to report any further tax to be paid or any repayment. Please see IRS forms availability table for TurboTax individual (personal) tax products for additional information.