Form 5329 disappeared after today's TurboTax update

[srgould41]

Hi all,

I was happy with my return and decided to e-file today (2/26). When I opened TurboTax it needed an update which I installed. When I went to the Print Center to review the forms one final time I noticed that Form 5329 is no longer there. In January I had to request that my 2021 Roth contributions be returned (earned too much). I had previously manually created the 1099-R since the refund was in January 2022. 

The income tax due still looks right, but are we not supposed to file Form 5329 (part 4 for Roth)? Looking at the form it is now blank where previously it had the contribution and returned amounts listed in it. 

[DanaB27]

Yes, if you are under 59 1/2 then the 10% early withdrawal penalty should have been calculated on Form 5329 Part 1.

No, you will not have anything in Part 4 of Form 5329 for the 6% excess contribution penalty since you withdrew the excess contribution plus earnings before the due date.

[srgould41]

I have not yet files for 2021. I am over 60 and received the contribution and earnings back last month. There should be no penalties or interest due. I am confused as to whether I need to file form 5329 at all.

I have been getting conflicting answers depending on who answer posts. I had a previous post discussing if I needed one for my wife or just myself. TurboTax only had one for me included in the return. The answer was that I needed one for myself. It was included in the TurboTax Print Center so I believed this was accurate.

Now, after the last update, Form 5329 is no longer present in the Print Center. 

I wonder if this was actually my doing. Maybe the form was removed after saving and reopening the return and not related to the software update? When I asked for help last week creating the 1099-R I was told to use codes P and J. However, I don't believe code J is appropriate since I did not take "early distributions" for the Roth. Since that first discussion I removed code J because that ended up creating a 10% penalty on the earnings which is not required in my case as I am over 60. 

[srgould41 · Accepted solution]

I tested my theory that using code J caused the form to be added to the Print Center and removed when only using code P. This is in fact what happened. 

I am closing this post. Thanks for your reply DanaB27. 

[DanaB27]

Please be aware, that the correct codes for a return of excess Roth contribution plus earnings are codes P and J. When you continue in the interview you are able to claim the exception to the 10% early withdrawal penalty because you are over 59 1/2:

1. Login to your TurboTax Account 
2. Click on the "Search" on the top and type “1099-R”
3. Click on “Jump to 1099-R”  and enter your 1099-R
4. Click "continue" after all 1099-R are entered and answer all the questions.
5. Continue until "Did you use your IRA to pay for any of these expenses?" screen and enter the amount under "Another reason".

[srgould41]

Thanks so much for the additional information. NOW it makes sense to me. 

Question: What goes in the box for "Another reason"?

In my case I contributed $7,000. I was refunded $7,030.01. $30.01 was the earnings returned. 

So do I enter the full $7,030.01 or the $30.01?

[DanaB27 · Accepted solution]

You will enter the full $7,030.01.

[srgould41]

That did the trick! Thanks so much! Also of note, form 5329 is now back in the Print Center.