Reporting 1099r code J

[Scouse-s]

I made a Roth IRA contribution ($6000) in 2023 for the year 2022. I realized in 2024 that I was ineligible to make that contribution, hence removed the excess contribution in 2024 and paid 6% penalty for the years 2022 and 2023. Now, Fidelity issued me a 1099r form with distribution code J. Box 2b is checked meaning taxable amount is not determined. The amount withdrawn is only the contribution amount. Is it sufficient to report the 1099r code J form using form 1040 where line 4a will show $6000 and line 4b will show $0. Is that sufficient or there is more to it? Any clarification is much appreciated. 

[DanaB27]

Yes, you should have $6,000 on line 4a and $0 on line 4b (assuming you had no other IRA distributions). You also should have Form 5329 part IV showing that the excess contribution was resolved by this distribution. 

[Scouse-s]

Thank you, are there instructions on how to populated both 1040 and 5329 for this purpose in TurboTax ? 

[ThomasM125]

You just need to enter the Form 1099-R with the code "J" in box 7 and the distribution will be listed on line 4(a) of your Form 1040 and Form 5329 will be populated as follows:

1. Find the Retirement Plans and Social Security menu option in the Wages and Income section of TurboTax
2. Start or Update IRA, 401(k), Pension Plan Withdrawals (1099-R)
3. Choose Add (Another) 1099-R

To view your form 1040 and schedule 1 to 3:

1. Choose Tax Tools from your left menu bar in TurboTax Online while working in your program
2. Choose Tools
3. Choose View Tax Summary
4. See the Preview my 1040 option in the left menu bar and click on it
5. Choose the Back option in the left menu bar when you are done 

[Scouse-s]

Thank you for the reply. One more question in this regard. Since this is a 1099r with code J, do I need to fill out 8606 part 3 ? Just to reiterate, I only removed the excess contribution from Roth IRA, no relevant gains were withdrawn. 

[DanaB27]

Yes, TurboTax will fill out Form 8606 part 3 since the code J indicates this was an unqualified distribution. Make sure you enter the net contributions prior to 2024 (including the 2022 excess contribution) in the follow-up questions after you enter all Form 1099-Rs:

1. Login to your TurboTax Account 
2. Click on "Search" on the top and type “1099-R” 
3. Click on “Jump to 1099-R” and enter all your 1099-Rs
4. Click "Continue" on the "Review your 1099-R info" screen
5. Answer all the questions and make sure you enter the net contributions prior to 2024 on the "Enter Prior Year Roth IRA Contributions" screen (include the excess of $6,000 from 2022)
6. On the "Do you have any Excess Roth Contributions" answer "Yes"
7. On the "Enter Excess Contributions" screen enter the total excess contribution from 2022.

[Scouse-s]

Since the mistake of 2022, I didn't make any direct Roth contributions. I did make backdoor Roth contributions for 2023 and 2024. Does the net contribution to Roth include ($6000+2023 contribution through backdoor +2024 contribution through backdoor). I know I will report the backdoor contribution in sections 1 and 2 of 8606. 

[DanaB27]

No your net contributions would be only $6,000 assuming you made none before 2022. The 2023 conversion is entered on the next screen in the interview (If you used TurboTax to report the conversion it should be carried over):

1. On the "Any Roth IRA Conversions?" screen answer "Yes" if you made conversions before 2024
2. Continue through the questions.

[Scouse-s]

Got it, thank you. I appreciate it.