1099-R multiple codes

You put the distribution amount in box 1 on 1099-R form. The earnings go in box 2a. You put code 8 in box 7. 

To clarify, you stated that you made the excess contribution in 2024 and withdrew the excess in 2025 with earnings. If that is case, then you should only get a 2025 Form 1099-R in 2026 with codes P but your financial institution is saying they will issue 3 Forms with different codes? Also, there is no MAGI limit for making traditional IRA contributions. The MAGI only affects the deductibility. 

The 2025 Form 1099-R with codes P will have to be included on your 2024 tax return and you have two options:  

• You can wait until you receive the 2025 Form 1099-R in 2026 and amend your 2024 return or
• You can report it now in your 2024 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 2025 Form 1099-R into the 2025 tax return since the withholding is reported in the year that the tax was withheld. The 2025 code P will not do anything to change the income in the 2025 tax return income but the withholding will be applied to 2025.

To create a Form 1099-R in your 2024 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 2024?"
5. Select "I'll type it in myself"
6. Box 1 enter total distribution (contribution plus earning) of $7,339.73
7. Box 2 enter the earnings of $339.73
8. Box 7 enter P
9. Check the "IRA/ SEP/ SIMPLE" box
10. Click "Continue"
11. On the "Which year on Form 1099-R" screen say that this is a 2025 1099-R.
12. Click "Continue" after all 1099-R are entered and answer all the questions.
13. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount of earnings under "Corrective distributions made before the due date of the return".

Please be aware, code P will say in the drop-down menu "Return of contribution taxable in 2023" you can ignore that since the follow-up question will tell TurboTax that it will be taxable in 2024.

[Edited 2/21/2025 | 11:50 am PST]

@mjc19 

Based on the description of the transactions and the Forms 1099-R, what the bank did to process this return of contribution makes no sense.  (Bank personnel are notorious for being rather clueless about how to process transactions involving IRAs.)

What they should have done is process a single return-of-contribution transaction that would be reportable on a single Form 1099-R with $7,339.73 in box 1, $339.73 in box 2a, code P in box 7 and the IRA/SEP/SIMPLE box marked.

The only reason that there would be $145.09 reported with code 1 is if there had been only $194.64 of gain attributable to the $7,000 being returned, meaning that the $145.09 was not part of the return of contribution.  Even then the $195.64 should be present on the code-P Form 1099-R.  Based on the description of events, under no circumstances should anything be reported with code 8.  (Code 8 might make sense if this was a return of contribution from an employer plan like a 401(k), but nothing suggests that this is anything but a return of contribution from a traditional IRA.)

Note that there is no MAGI limit for being eligible to contribute to a traditional IRA.  MAGI only has the potential to affect the deductibility of a traditional IRA contribution.  Still, you were permitted to obtain a return of the contribution even though it was not an excess contribution.