Excess Roth IRA Contribution

[JR20211]

In 2023 I made an excess Roth IRA contribution of $4,620 - there were $644 in earnings for a total of 5,264.  I contacted my brokerage and completed a Return of Excess Roth IRA Contribution form in February 2024 before filing my 2023 taxes.  On my 2023 tax return, on Form 5329 my excess contribution of  $4,620 is listed and after going through the Turbo Tax prompts, Line 25 has an amount of $277 (6%).  In January 2025 I received my 1099-R with Box 1 (Gross Distribution) $5,264; Box 2 (Taxable Amount) $644; Box 7 (Distribution Codes) PJ. 

When working on my 2024 tax return, going through the prompts I enter the 2024 Form 1099-R information and am advised that I may need to amend my 2023 tax return.  I have read where individuals can "create their own 1099-R" in advance of receiving it so the information can be entered on their tax return for the year in which earnings accrued.  I was not aware of this option when filing my 2023 tax return and would have expected Turbo Tax to walk me through that option at that time if it was valid.   Given the situation, do I need to amend my 2023 tax return so that I can include the $644 there or are there any other valid options at this point?  Thank you for your insights/guidance.  

[Karen L]

Please see this question and help information posted on: 

https://ttlc.intuit.com/community/retirement/discussion/how-to-correct-2022-2023-and-2024-excess-con...

[MinhT1]

Yes. You now have to amend your 2023 tax return.

On your amended 2023 tax return, you do not report the excess contribution as it has been withdrawn. The earnings have to reported and taxed in 2023.

For this, you would create a 2024 form 1099-R with the total distribution (excess plus earnings) in box 1, the earnings in box 2a and code PJ in box 7. (In fact, it is the 2024 1099-R that you received). You then enter this 1099-R on your amended 2023 tax return, and the earnings will be taxed. When entering this form 1099-R, make sure to indicate that the year on the form is 2024, as this is a replica of the form you will receive for year 2024 in 2025.

When you amend, you'll not have to pay the excise tax of 6% ($277) for tax year 2023 as the excess have been withdrawn before April 15, 2024.

When you receive the 2024 form 1099-R with code PJ in box 7 (in 2025) for this withdrawal, there is no further action needed.