Excess Roth IRA Contribution

[mzuccaromazcpa]

I made a contribution to my 2020 Roth IRA.  I withdrew the contribution along with income it earned.  How  and where do I report this>

[macuser_22]

You should receive a 1099-R next January, 2022 to report it on an amended 2020 tax return.

[mulberry64]

from: https://www.thebalance.com/what-to-do-if-you-contributed-too-much-to-your-roth-ira-3192888

Withdraw the Excess Contribution

A withdrawal is the removal of assets from a retirement account so the amount withdrawn doesn't count toward a person's contributions for that particular tax year. According to the IRS, you can withdraw contributions on or before the due date for filing your tax return.

You must also withdraw any earnings on the excess contributions. Earnings are considered earned and received in the tax year during which the excess contribution was made.

You can withdraw contributions from a Roth IRA up until the Oct. 15 extended deadline if you've requested an extension of time to file your tax return. Withdrawals aren't treated as distributions; they're like an "undo" function. It's as though the contribution was never made in the first place.

[2004taxfile1]

 @DanaB27

In @Drdok1 case,  He filed 2019 excess contribution in 2020 as  a substitute 1099-R.  Does he have to enter this again in 2021 tax return once received 2020 1099-R form  and re-enter earnings as Taxable amount in Box2a?

How to enter it to void paying penalty again?

thanks

[macuser_22]

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@2004taxfile1 wrote:

 @DanaB27

In @Drdok1 case,  He filed 2019 excess contribution in 2020 as  a substitute 1099-R.  Does he have to enter this again in 2021 tax return once received 2020 1099-R form  and re-enter earnings as Taxable amount in Box2a?

How to enter it to void paying penalty again?

thanks

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If the tax on box 2a was paid in 2019 with a 1099-R box 7 code P or PJ then nothing goes on to 2020 tax return at all.      If the excess carried over to 2020 then deleted it form the IRA contribution section.

[hkc]

Hi:

If my Excess contribution had a loss, how would I report this loss with a make up 1099R in my 2020 tax so I don't have to file amended tax next year?  Or would I have to file amended tax if my 2022 1099R on this Excess refund if I have a loss?  If I don't have to file amended tax return next year because of the loss, I'd like to skip trying to make up a 1099R to include it in this year's tax filing of 2020Tax.

Thanks,

[macuser_22]

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@hkc wrote:

Hi:

If my Excess contribution had a loss, how would I report this loss with a make up 1099R in my 2020 tax so I don't have to file amended tax next year?  Or would I have to file amended tax if my 2022 1099R on this Excess refund if I have a loss?  If I don't have to file amended tax return next year because of the loss, I'd like to skip trying to make up a 1099R to include it in this year's tax filing of 2020Tax.

Thanks,

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If this is a Roth IRA then the 1099-R you receive would have the returned amount in box 1 and a 0 (zero) in box 2a with a code PJ in box 7.    Only the box 2a amount (zero) would be taxable.    You can report it on your 2020 tax return  just to show the IRS that there is no tax to pay or just ignore it.

[SONOFDRAGON]

Just need to clarify this. Code P is Return of Contribution taxable in 2018 and #8 is Return of Contribution taxable in 2019. Should it be P or #8?  Thank you.

[macuser_22]

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@SONOFDRAGON wrote:

Just need to clarify this. Code P is Return of Contribution taxable in 2018 and #8 is Return of Contribution taxable in 2019. Should it be P or #8?  Thank you.

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When entering a code P it will ask if this is a 2019 or 2020 1099-R .  Say 2020 and the 2018 changed to taxable in 2019.  (Code P advances the year each year).

[AL107]

Hi @macuser_22 , I have a very similar situation as @hkc  with the small bit of difference that I realized that I have over contributed to my 2021 Roth IRA after filing my 2021 taxes. I however have removed the excess on time in 2022 with loss. We have received 2022 1099-R with 0 taxable income with codes PJ. There is really nothing to report or to amend for 2021.

But I just wanted to confirm if I can simply ignore this 1099-R or do I have to go back and amend my 2021 return which will not change anything since there was no gain? 

Going through multiple posts on these forums I'm getting conflicting answers. I would have definitely  entered made up 2022 1099-R into my 2021 tax return should I caught and corrected this error before filing.  Really appreciate your help!

[ThomasM125]

Since there is no taxable income, you don't need to amend the return. Since it is a ROTH IRA, you don't need to report the distribution since it won't be taxable which is indicated on the form.