Withdrawing Excess Roth IRA Contribution

[gk5040]

Thank you for reminding me.  My husband got a 1099R from Vanguard so I assumed it would be the same and I entered that number.  Luckily, I havent efiled their taxes yet so I will have my daughter call and confirm!

[Darenl]

Hi @DanaB27 sorry for bugging you. I've googled and found this thread that is very similar to my situation and your answer seems to work for me exactly. 

However I have 2 quick follow ups and hope you can share your thoughts:

1. I made the contribution of 7K to Roth IRA in Feb 2025, for 2024 , and later requested return of excess in April 13 2025 before the tax deadline with $30 earning, so total of $7030. The only difference from OP is that my contribution is made in 2025 for 2024.  But I think the solution you suggested above still applies to me right? 

2. Do I expect form 8606 to generate? After I followed your solution, by entering form 8606 with code PJ, and select year 2025 for this 1099-R, I don't see 8606 generated. I thought a distribution from Roth IRA should trigger 8606? But is it because return of excess is not considered an actual distribution ?

Thank you!

[GM45]

Hello Dana:

I was the one that made an erroneous Roth contribution of $8000 in 2024. You and others helped me create a 1099-R on my 2024 return so I could show I was withdrawing the contribution plus earnings, using codes P and J.

In one response yo wrote: "You can report it now in your 2024 return and ignore the 1099-R ("meaning the 2026 1099-R I think") when it comes unless there is Box 4 Federal Tax withholding and/or Box 14 State withholding. "

I have now received that 1099-R in 2026.  Box 2a shows my earnings on the erroneous contribution as a Taxable Amount. But there are no values in Box 4 Federal Tax withholding and/or Box 14 State withholding. Plus I see that Box 7 has Distribution Codes PJ.

To confirm, you are saying I don't add this 2026 1099-R to the return I am filing now?

Thanks again, Gerry

[RogerD1]

@GM45 Yes, you would not enter the 2025 1099-R on your 2025 return for earnings you received on excess contributions on a Roth overcontribution made for 2024,  since these earnings were already reported as income in 2024.  You may want to go back and look at your 2024 return to make sure that the earnings reported on the 1099-R match up with what was reported on your 2024 return.  If so, you are then good to go!

[GM45]

Thanks Roger. I check and the numbers are the same.

[GM45]

Interesting to see in the 2025 1099-R I just received, it has the codes PJ in box 7 Distribution Codes. I assume this is how the IRS knows I paid the tax already last year? And of course these were the codes that I was told to enter on my 2024 Return.

[gk5040]

The number I entered on 2024 1099R for 2025 (the 1099R I created) in box 2a does not match up with what I reported in 2024 for 2025.  Vanguard's 2025 1099R added the tax withheld to 2a's taxable number.  Now the gross distribution number is higher by the $46 tax as well.  The $46 in taxes withheld is in box 4.  Codes J & P appear in box 7.  I entered all the information into 2025's Federal return as it appears on the 2025 1099R.  Do I have to amend 2024 to show the $46 dollars was removed from the Roth IRA?  

[DaveF1006]

Yes, you need to amend, to ensure the "Taxable Amount" matches the official form so the IRS computers don't flag it as under-reported income.

Steps to Take:

• Amend 2024 Return: Use the official Vanguard 1099-R figures for 2024. Report the accurate gross distribution (Box 1), the taxable amount (Box 2a, which includes the $46), federal tax withheld (Box 4, $46), and codes P and J in Box 7.
• Understand Codes P&J: The codes P and J indicate a Roth excess contribution removal (P) from a Roth IRA (J). The taxable amount is typically the earnings on that excess, which should be included in 2024 income, along with the penalty (if applicable).
• Address the $46 Difference: If you underreported income by $46 and did not claim the $46 withholding, the correction may be minor. If you overreported it, amending ensures you get credit for the tax already withheld.

If this happens going forward, do not enter a manual 1099-R you created if it conflicts with the official 2024 Vanguard 1099-R. Instead, ask the issuer of the 1099 R to issue you a corrected 1099 R. 

•  

[gk5040]

We caught this error in 2025 while preparing the 2024 taxes.  The withdrawal of excess contributions was made in March of 2025, so the tax was paid (via Vanguard) in 2025, Vanguard withdrew the $46 from the account.....I wish they had not done that.  I was specifically told last year by Turbo Tax that the taxes withheld in 2025 goes on 2025's return, because they were paid in 2025.  I am still confused what to enter on 2025's return.  Should I enter all the 2025 1099 R information into 2024 including the tax, then I enter NO part of the 2025 1099R in 2025???  Can I amend 2024's after I submit 2025's return?  Or do I need to do it before?

[gk5040]

I just so your other response.  I asked one more question on the other post.  I read that post after reading this post.  Sorry again for the duplicate question.