Two 1099R's for excess contribution?

[slinba]

I rolled over the after-tax Roth portion of my Fidelity 401k to a new Roth IRA with M1 finance in June 2019. In July 2019, Fidelity informed me that there was an excess 2018 contribution of $2200 which was ineligible for the rollover. Apparently, the company made a 401K contribution at end of Q1 2019 towards 2018 for all employees, which led to my 2018 contribution to exceed the max limit. Thus Fidelity caught this issue only in Q2 2019.

To rectify, Fidelity recommended that M1 distribute the excess amount and earnings on that amount. In total, M1 distributed $2500 to me ($2200 + $300 earnings estimate), which went to a regular checking account.

Now I have received two 1099-R's, from Fidelity and M1 Finance for the amount of $2200 and $2500, with box 7 distribution codes E and J respectively.  What do I have to do to make sure we report this correctly to IRS? Does our 2018 tax filing need to be amended?

[DianeC958]

You need to report the 1099-Rs on your 2019 tax return.  You will be taxed on the earnings and receive a 10% penalty for early withdrawal.  You just add the 1099-R information into TurboTax the same way it shows on the forms you received.

The 1099 R will be entered in the Retirement Plans and Social Security section.
• Select Federal Taxes
• Select Wages and Income
• Select Show More at Retirement Plans and Social Security
• Select IRA, 401(k), Pension Plan Withdrawals (1099-R)

Since the over contribution was made in 2018 you need to fill out form 5329.  This is a stand alone form that you can send in without amending your 2018 tax return. 

Link to form 5329

This form reports to the IRS the excess contribution amount and charges a 6% penalty for the excess contribution.

If you do not want to fill it out manually you can amend your 2018 return and TurboTax will fill out the form.  If you amend your return to get the form filled out you can still just send the form 5329 to the IRS by itself along with the payment due.

Link on How to amend Prior Year Returns Using TurboTax