Help requested filling out my 1099-R due to excess contributions to my Roth IRA in 2022.

[Primaniac]

I would like some specific advice filling/generating the 1099-R while I wait for it from Fidelity. I have an excess contribution of 340 USD based on my MAGI. I requested Fidelity to return 350 USD on April 12th and don't think they will process it before the deadline.

To my questions:

1. I am assuming when I type in my Roth IRA contribution in TT, I specify the entire 6000 USD that I contributed?

2. Next, when I am filling out my 1099-R, what will be my gross distribution? Is it just the 350 USD? My Roth contributions luckily are sitting in my account and have not been invested yet (I transferred most of the money a few weeks back), so I don't think there are any earnings/losses on those contributions.

3.  When filling Box 7, I read some instructions asking that to be specified at J and P. But Option 8 is "Return of contribution taxable in 2022". Why is this not applicable too? I am filing my 2022 taxes, I have requested a return of my 2022 excess contributions, so would this not be more appropriate, as opposed to J and P?

Thanks in advance for your help. 

[MaryK4]

If you just took a distribution of $350, you CANNOT follow the steps you have listed because it will not be coded correctly.   See Excess IRA Contributions | Rules & Options

[Primaniac]

@MaryK4 Sorry, would like to clarify. When I say I asked Fidelity to return 350 USD, I filed a Return of Excess form before the deadline. I did not ask them to return it as a normal distribution. Pretty much used the exact link you sent me actually. 

[DanaB27]

Yes, you will enter the Roth IRA contribution in the IRA interview and enter the excess contribution amount (ignore earnings and losses here) on the penalty screen:

1. Open your return
2. Click “Deductions &Credits” on the top
3. Click "I'll choose what to work on"
4. Scroll down to “Traditional and Roth IRA Contributions” and click “Start”
5. Select “Roth IRA”
6. Enter your Roth IRA contribution
7. Continue until the penalty screen and enter the excess contribution amount withdrawn (ignore earnings and losses).

You will get a 2023 Form 1099-R  in 2024 with codes P and J for the withdrawal of excess contributions and earnings. This 1099-R will have to be included on your 2022 tax return and you have two options:  

• You can wait until you receive the 2023 Form 1099-R in 2024 and amend your 2022 return or
• You can report it now in your 2022 return and ignore the 1099-R when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. Then you must enter the 2023 Form 1099-R into the 2023 tax return since the withholdings are reported in the year that the tax was withheld. The 2023 code P will not do anything to the 2023 tax return but the withholdings will be applied to 2023.

To create a Form 1099-R in your 2022 return please follow the steps below:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R”
4. Answer "Yes" to "Did you get a 1099-R in 2022?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning or contribution minus loss)
7. Box 2a enter the earnings (or $0 if you had a loss)
8. Box 7 enter J and P
9. Click "Continue"
10. On the "Which year on Form 1099-R" screen say that this is a 2023 Form 1099-R.
11. Click "Continue" after all 1099-R are entered and answer all the questions.
12. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Another reason" if you are over 59 1/2 (if you are under 59 1/2 and removed the excess after December 29, 2022, then enter it next to "Corrective Distributions made on or after December 31, 2022")

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2021" but you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2022.

Code P on a 2023 Form 1099-R will mean "Excess contributions plus earnings/excess deferrals (and/or earnings) taxable in 2022".

@Primaniac