Roth IRA Excess distribution (no gains), wrong code from payer. How to correct.

[vannerpham]

Hi,

I had put money into a Roth IRA and realized that I would go over income limits, so I asked payer return the money (100% of my contributions) within the same year.  The agent did the transaction as an early distribution from a Roth IRA (code J) instead of an excess distribution.  I called the payer and they are not able to correct things of their side.  How do I handle the correction?  Right now, with code J, I will have to pay a penalty as I'm under 59 1/2, but this was an excess distribution.

Here's the scenario:

1) I contributed about $5,500

2) The market went down a gross distribution was about $5,100 ($400 loss).  This was amount in Box 1.

3) $1,200 was withheld for Federal tax (Box 4) on 1099-R

4) $1,200 was withheld for State tad (Box 14) on 1099-R

5) 2b Tax amount not determined is checked on 1099-R

6) Distribution code (Box 7) is listed as J, but is incorrect

What would my new 1099-R look like?  How do I correct this in my taxes when the payer won't correct things on their end?

[DanaB27]

If the payer refuses to correct the 2022 Form 1099-R then you would have to file a substitute Form 1099-R (you won't be able to e-file):

1. Login to your TurboTax Account 
2. Click on "Search" on the top right and type “1099-R” 
3. Click on “Jump to 1099-R” 
4. Select "Change how I enter my form" on the "Let's import your tax info" screen
5. Select "Type it myself"
6. Box 1 enter total distribution (contribution minus loss)
7. Box 2a enter $0
8. Box 7 enter J and 8
9. Continue through the questions until the "Do any of these situations apply to you?" screen select "I need to file a substitute 1099-R"