Return of excess Roth IRA contribution 2024

[QQSD]

Hi,

I made a $7000 contribution to Roth IRA in March 2024, then realized I don't qualify Roth IRA contribution due to income limit. I moved the $7000 back to my nonretirement account the very next day. So both contribution and return of excess contribution done in 2024.  But I didn't know I needed to fill out the IRA return of Excess Contribution form with my broker to get the correct 1099-R.

So I received a 1099-R 2024, in which this $7000 is counted as early distribution. Since box 7 is coded as J only.

I called my broker today, they said I can still send in the IRA return of Excess contribution form before 4/15/2025. They will issue a corrected 1099-R, but not till 5/30/2025.

So my question is do I still need to enter the 1099-R I have now, but which will count the $7000 as early distribution and I will get taxed, or can I just enter one my self, to put both J and P into box 7, and check the corrected box to avoid getting taxed now and filing amend later?

Thank you for your help!

[DanaB27]

Yes, you need to enter this Form 1099-R as shown. No, you cannot just change the code since you did not withdraw the earnings with the excess contribution.

To clarify, did you have any Roth IRA contributions in prior years? If yes then you can enter your net contributions prior to 2024 in the follow-up questions. Note, you can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free.

1. Click on "Search" on the top and type “1099-R” 
2. Click on “Jump to 1099-R” and enter all your 1099-Rs
3. Click "Continue" on the "Review your 1099-R info" screen after you entered all you Form 1099-R
4. Answer "Owned Any Roth IRA for Five Years?" screen
5. Continue through the questions and make sure you enter the net contributions prior to 2024 on the "Enter Prior Year Roth IRA Contributions" screen
6. On the "Any Roth IRA Conversions?" screen answer "Yes" if you made conversions before 2024
7. Continue through the questions.

[QQSD]

Thank you Dana for your respond.

I am not eligible for roth IRA contribution, so have been doing backdoor in $6000 in 2020 and $6000 in 2021. 

No contribution in 2022, and 2023. So I forgot how to do backdoor in 2024, and contributed $7000 directly to Roth, and then immediately withdraw the $7000 in 2024.

Since my roth IRA fund is from conversion from traditional IRA in 2020 and 2021, do they count as Roth IRA contributions where you want me to enter at 

1. Continue through the questions and make sure you enter the net contributions prior to 2024 on the "Enter Prior Year Roth IRA Contributions" screen

Thank you for your help!

[QQSD]

Hi Dana,

I followed your advice and entered the 1099-R I received from broker without changing anything.

clicked continued , entered 0 at Roth IRA contribution,

then chose "I had conversion from Traditional IRA"

entered 2020, and 2021 nondeductible contribution $6000 each, and was able to see the tax on $7000 was removed.

then the page took me to if I "made excess Roth IRA contribution for Prior Years".

Do I enter the 2024 $7000 excess contribution here? Does "Prior Years" include 2024, or the years before 2024?

Thank you for your help!

[DanaB27]

Yes, you entered it correctly.

[QQSD]

Thank you!

Sorry one more question.

then the page took me to if I "made excess Roth IRA contribution for Prior Years".

 Does "Prior Years" include 2024, or the years before 2024?

Do I enter the 2024 $7000 excess contribution here?

[DanaB27]

No, do not enter $7,000 on the "made excess Roth IRA contribution for Prior Years" screen. On this screen you only enter excess contributions made before 2024 that weren't removed from the Roth IRA.

[QQSD]

Thank you!